KivaPearl Microfinance Limited
Uganda
Status Update: December 28, 2011
Pearl's loan portfolio on Kiva is currently showing a relatively high delinquency rate at 35.02%, and we wanted to give you some more information about this situation.
Pearl is currently experiencing liquidity difficulties, which is impacting its ability to make its repayments to Kiva on time. To assist Pearl, Kiva has agreed to restructure the remaining balance outstanding into three installments, to be paid over the next three months, along with regular monthly balances. By April 2012, Pearl is expected to be current on delinquent repayments.
Liquidity is a payment timing issue, where the timing of funds due to be paid by an organization does not match the timing of incoming funds. This is an issue all businesses must manage, but is more difficult to balance for an organization managing multiple repayment obligations, as most Kiva Field Partners are. In the current situation with Pearl, a currency devaluation of the Ugandan Shilling against the US Dollar, combined with Kiva's net billing system, contributed to a situation where Pearl experienced liquidity difficulties.
Recently, the Ugandan Shilling significantly devalued against the US Dollar. As Kiva loans are made in US Dollar loans, currency fluctuations can impact Field Partners. In the case of Pearl, loans are received by Pearl in US Dollars, and loaned to the borrower in Ugandan Shillings. In response to the currency devaluation, Pearl temporarily paused posting new loans on Kiva to wait until the currency had stabilized against the US Dollar.
At the same time as Pearl paused posting new loans, a large number of Pearl loan repayments came due. Typically, repayments due would be offset by new funds being loaned, leaving only the difference to be paid in cash. Kiva refers to this as our net billing system, meaning that we subtract the amount of repayments that a Field Partner owes to Kiva lenders from the amount that a Field Partner fundraises for borrowers on Kiva. Because Pearl temporarily paused fundraising on Kiva, the difference to be paid in cash was much larger than usual, and Pearl faced liquidity constraints.
The new repayment structure, agreed between Pearl and Kiva, will result in continued high delinquencies over the next few months until the adjusted repayment schedule catches up to the original repayment schedule.
Pearl's loan portfolio on Kiva is currently showing a relatively high delinquency rate at 35.02%, and we wanted to give you some more information about this situation.
Pearl is currently experiencing liquidity difficulties, which is impacting its ability to make its repayments to Kiva on time. To assist Pearl, Kiva has agreed to restructure the remaining balance outstanding into three installments, to be paid over the next three months, along with regular monthly balances. By April 2012, Pearl is expected to be current on delinquent repayments.
Liquidity is a payment timing issue, where the timing of funds due to be paid by an organization does not match the timing of incoming funds. This is an issue all businesses must manage, but is more difficult to balance for an organization managing multiple repayment obligations, as most Kiva Field Partners are. In the current situation with Pearl, a currency devaluation of the Ugandan Shilling against the US Dollar, combined with Kiva's net billing system, contributed to a situation where Pearl experienced liquidity difficulties.
Recently, the Ugandan Shilling significantly devalued against the US Dollar. As Kiva loans are made in US Dollar loans, currency fluctuations can impact Field Partners. In the case of Pearl, loans are received by Pearl in US Dollars, and loaned to the borrower in Ugandan Shillings. In response to the currency devaluation, Pearl temporarily paused posting new loans on Kiva to wait until the currency had stabilized against the US Dollar.
At the same time as Pearl paused posting new loans, a large number of Pearl loan repayments came due. Typically, repayments due would be offset by new funds being loaned, leaving only the difference to be paid in cash. Kiva refers to this as our net billing system, meaning that we subtract the amount of repayments that a Field Partner owes to Kiva lenders from the amount that a Field Partner fundraises for borrowers on Kiva. Because Pearl temporarily paused fundraising on Kiva, the difference to be paid in cash was much larger than usual, and Pearl faced liquidity constraints.
The new repayment structure, agreed between Pearl and Kiva, will result in continued high delinquencies over the next few months until the adjusted repayment schedule catches up to the original repayment schedule.
Status Update: May 5, 2010
PEARL’s star rating has been changed from 4 stars to 3 stars. While Kiva takes many factors into account in assessing risk, recent turnover of key management staff at PEARL was a key driver in our revaluation of PEARL’s rating. Kiva will continue to monitor PEARL and update the partner page with substantive changes.
Vision
"All economically active population of Uganda accessing financial services."
Mission
"To be a leading Financial Institution providing suitable financial services to the economically active population in Uganda."
Background
PEARL Microfinance Ltd is a company limited by shares. PEARL (Promotion of Economic transformation And Realization of sustainable Livelihood) was originally founded as a part of Feed the Children Uganda (FTCU). After 12 years working as the community-banking department of FTCU, Pearl spun off to work as a for-profit microfinance institution in July 2006 when it was registered as a company limited by shares.
PEARL grew its portfolio, and built its capacity, from donations, grants, and loans from a large variety of organizations: Canadian Feed The Children, SUFFICE, STROMME Foundation, Action Aid Uganda/European Union, ECLOF, Microfinance Outreach Plan, USAID- PRESTO, SPEED projects, Microfinance Support Center, OIKO Credit, Kiva, and Post Bank.
Currently, PEARL Microfinance is regarded as one of the most progressive micro-finance institutions in Uganda. It is an active member of the Association of Microfinance Institutions of Uganda (AMFIU) and Institute of Corporate Governance of Uganda (ICGU). AMFIU rates it in category A in terms of its operations, portfolio size and quality, outreach, operational/financial sustainability and other key aspects.
Operations
PEARL operates in 16 Districts of Uganda, using 11 branch offices and 3 field offices. Currently PEARL serves over 16,000 clients with a portfolio size of 2.5 million USD.
Types of Loans offered:
- Group Loans to community banking groups with membership of 15 - 45 people.
- Solidarity group loans to small groups of 5 – 15 members.
- Salary earner group loans to staff of institutions/organizations e.g Schools, Hospitals, Prisons and Police departments, NGOs etc.
- An agricultural loan product
- Individual loans
- SME (Small and medium sized enterprize) loans
Additional financial products offered:
- Savings mobilization through Commercial banks.
- Loan insurance to cover natural and accidental death of client.
Future Plans
Build a leading financial institution/company licensed by Bank of Uganda.
- Join our lending team: "Friends of Pearl Microfinance Limited"
Repayment Performance on Kiva
Repayment Performance on Kiva| This Field Partner | All Kiva Partners | ||
| Start Date On Kiva | Sep 9, 2007 | Oct 12, 2005 | |
|---|---|---|---|
| Total Loans | $8,086,225 | $280,713,025 | |
| Amount of Raised Inactive Loans | $0 | $10,525 | |
| Number Of Raised Inactive Loans | 0 | 17 | |
| Amount of Paying Back Loans | $791,775 | $76,564,275 | |
| Number Of Paying Back Loans | 409 | 92,262 | |
| Amount of Ended Loans | $7,294,450 | $204,138,225 | |
| Number Of Ended Loans | 3,109 | 280,125 | |
| Delinquency Rate | 15.53% | 2.45% | |
| Amount In Arrears | $43,582 | $1,254,316 | |
| Outstanding Portfolio | $280,698 | $51,149,836 | |
| Number of Loans Delinquent | 196 | 11,545 | |
| Default Rate | 0.17% | 1.12% | |
| Amount of Ended Loans Defaulted | $12,208 | $2,280,201 | |
| Amount of Ended Loans | $7,294,450 | $204,138,225 | |
| Number Of Ended Loans Defaulted | 26 | 6,779 | |
| Currency Exchange Loss Rate | 0.01% | 0.00% | |
| Amount of Currency Exchange Loss | $587 | $12,824 | |
| Refund Rate | 1.39% | 1.24% | |
| Amount of Refunded Loans | $112,775 | $3,477,150 | |
| Number Of Refunded Loans | 50 | 4,129 |
Loan Characteristics On Kiva
Loan Characteristics On Kiva| This Field Partner | All Kiva Partners | ||
| Loans To Women Entrepreneurs | 62.05% | 74.90% | |
|---|---|---|---|
| Average Loan Size | $233 | $389 | |
| Average Individual Loan Size | $557 | $618 | |
| Average Group Loan Size | $2,760 | $1,631 | |
| Average Number Of Entrepreneurs Per Group | 12.2 | 8 | |
| Average GDP Per Capita (PPP) in Local Country | $1,700 | $3,402 | |
| Average Loan Size / GDP Per Capita (PPP) | 13.70% | 11.42% | |
| Average Time To Fund A Loan | 4.98 days | 3.96 days | |
| Average Dollars Raised Per Day Per Loan | $46.74 | $98.13 | |
| Average Loan Term | 5.2 months | 9.26 months |
Journaling Performance on Kiva
Journaling Performance on Kiva| This Field Partner | All Kiva Partners | ||
| Total Journals | 2,267 | 131,404 | |
|---|---|---|---|
| Journaling Rate | 63.03% | 39.40% | |
| Average Number Of Comments Per Journal | 0.26 | 0.16 | |
| Average Number Of Recommendations Per Journal | 4.20 | 4.21 |
Borrowing Cost Comparison (based on 2009 data)
Borrowing Cost Comparison (based on 2009 data)| This Field Partner | Median for MFI Peers in Country | All Kiva Partners | ||
| Average Interest Rate and Fees Borrowers Pay (Portfolio Yield) | 54.80% | 50.60% | 36.11% | |
|---|---|---|---|---|
| Average Partner Return On Assets (Average Profitability) | -3.6% | -0.9% | -1.45% | |
| Average Loan Size (% of Per Capita Income) | 43.05% | 86.90% | 43.69% |
Country Fast Facts
Country Fast Facts- Country:
- Uganda
- Capital:
- Kampala
- Official Language:
- English (official national language, taught in grade schools, used in courts of law and by most newspapers and some radio broadcasts), Ganda or Luganda (most widely used of the Niger-Congo languages, preferred for native language publications in the capital and may be taught in school), other Niger-Congo languages, Nilo-Saharan languages, Swahili, Arabic
- Population:
- 26,404,543
- Avg Annual Income:
- $1,700
- Labor Force:
- agriculture 82%; industry 5%; services 13%
- Population Below Poverty Line:
- 35%
- Literacy Rate:
- 69.90%
- Infant Mortality Rate (per 1000):
- 86.15 deaths
- Life Expectancy:
- 45.28 years
Field Partner Staff
Peter Bakaakiblue berry
blue berry
Amos Nakeba
Grace Nattoolo
Ronald Ntambi
scott scheide
richard wetaya
Richard Wetaya