Professor John Ddumba-Ssentamu
Vice Chancellor, Makerere University ; Chairman, Board of
Directors, Centenary Bank, Uganda
ESRC Reference - ES/N013344/1: Delivering Inclusive Financial
Development and Growth
Research Project Workshop
SOAS University of London
3rd – 4th March, 2017
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Centenary Rural Development Bank (CB)
Brief background
 Established by the Roman Catholic Church as a trust
fund in 1983, known as Centenary Rural Development
Trust
 Started financial operations in 1985
 Became a commercial bank in 1993 and changed its
name to Centenary Rural Development Bank
 Brand name is Centenary Bank….our bank
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Ownership of the Bank
 Both local and foreign
 Roman Catholic Church- 69.8%
 Stichtins Hivos-Tridos Funds based in the
Netherlands- 18.3%
 SIDI (International Solidarity for Development) based
in France- 11.6%
 Individuals- 0.3%
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Bank Mission
“To provide appropriate financial services especially
microfinance to all people particularly in rural areas in a
sustainable manner and in accordance with the Law”
In line with the mission, the bank serves rural areas and
reaches the lowest segments of society. Over 80% of the
loans are micro loans
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Growth of the bank
 Has maintained its growth momentum with total assets at
UgX 2.3 Trillion.
 Growth rate of 23.6% over a period of 17 years
 2016 Profit was UgX 109 Billion.
 Loans and advances stand at UgX 124.7 Billion
 Deposits stand at UgX 162.7 Billion.
 Deposit accounts currently stand at 1,482,617 as opposed to
236,000 in 2003.
Please note that (1 USD= UgX 3500)
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Growth of the bank (cont’d)
 Banks’ market share is 23.9% of all deposit accounts in
Uganda that currently stand at 6.2 million.
 Market share of total assets - 9.6%
 Market share of total deposits - 9.9%
 Market share of total loans in the country - 10.9%
 The bank is ranked 2nd in terms of profitability
 Overall position of the bank country wide is 3rd out of
24 banks
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Bank branch network
 Currently stands at 69 branches
 In terms of branch network, CB is ranked 2nd
 172 automated teller machines (ATMs) in 2016 as
opposed to 20 branches and 10 ATMs in 2003.
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Constraints to Financial Inclusion in Uganda
 Poor infrastructure- road network and communication has
limited coverage and delivery of financial services
 Very few financial service outlets reaching out to the weak
section of the population
 Financial institutions are out of touch with rural masses
and make little effort to seek ways of reaching them.
 Limited and inappropriate financial instruments for the
poor.
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Constraints to Financial Inclusion in Uganda(cont’d)
 Conventional collateral requirements exclude the poor.
Normally collateral requirements correspond the
situation of the relatively well off urban dwellers.
 Complex administrative procedures are beyond the
understanding of the rural masses and small savers.
 Loan applications procedures are complex and require
writing and reading skills.
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Constraints to Financial Inclusion in Uganda (cont’d)
 High interest rates-an issue which raises problems of
accessibility for the poor.
 Formal banks consider the poor to be high risk and
higher cost and therefore low return.
 Poor banking habits partly explained by poverty
illiteracy and lack of awareness financial services.
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Centenary Bank and Financial Inclusion
 A key strategy of the bank is financial inclusion
 Since its inception, the bank has tried to extend its services
to the following groups which other commercial banks
exclude:






Under privileged in the rural and urban areas including low
income households, small farmers , vendors
People engaged in the informal sector activities
Women
Majority of students
Old people
Physically challenged individuals
Small scale enterprises
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Centenary Bank and Financial Inclusion (cont’d)
 Deliberate effort to reach out to the poor and
low income groups through the provision of
affordable financial services tailored to their
needs
 CB has been setting up small sub branches
(service centres) with lean structures in rural
areas
- Keeping structures lean particularly in rural
areas have led to substantial reduction in
administrative costs.
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Centenary Bank and Financial Inclusion (cont’d)
 Commitment to business and profit growth initiatives
- Achievement of Inclusive growth: a growth process based on
fuller participation of all population segments
- Poverty reduction: raises the average income at the
household level leading to improvement in standard of living
- Better health- better education- better housing- better
nutrition
 Product design tailored to clients needs
 Improving access through proximity and affordability of
services
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Centenary Bank and Financial Inclusion (cont’d)
 Linkage banking
Centenary Bank has arrangements with third parties to improve
availability, accessibility and affordability of financial services to
the groups and their members.
-Third parties include Microfinance Deposit Taking Institutions
(MDIs), Savings and Credit Cooperatives (SACCOs) and Village
Savings and Loan Associations (VSLAs).
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Centenary Bank and Financial Inclusion (cont’d)
 To overcome the challenge of poor infrastructure,
CB is proposing digital banking
-Digital banking; involves provision of services
through digital platforms.. The objective is to grow
our mobile banking subscribers to about 700,000 by
end of year 2017, automate mobile banking
registration to include:
- account opening,
- provide Microloans using Mobile Phones and
- introduce internet banking.
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Centenary Bank and Financial Inclusion (cont’d)
 Government should play the leading role in
the improvement in the rural infrastructure
in terms of transport, communication
facilities and energy.
 Financial institutions should introduce new
technology into the delivery of financial
services to the poor.
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Centenary Bank and Financial Inclusion (cont’d)
 High interest rates:- an issue that raises problems of accessibility
for the poor. CB acknowledges that this is still a challenge and
this is because of the high cost of intermediation since the bank
mainly deals with microfinance.
 CB proposes to minimise this problem through linkage banking
to overcome the high levels of illiteracy among the lower income
groups.
 To overcome high levels of illiteracy and lack of awareness of
financial services, CB emphasizes financial literacy. This will
enhance financial inclusion among the lower income groups.
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Conclusion
 CB has provided access to flexible, convenient and affordable
financial services that empower and equip the poor to build
their way out of poverty in a sustained and self determined way
 There has been registered increase in access, usage and
quality of products and services provided by Centenary
Bank
 Sheer Stamina? Yes, the staying power, with unique ethos
for financial inclusion (access) and wider branch network
(outreach)
 But also with God’s blessings!
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Thank you for your attention!
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