Sseguku Microfinance is about connecting Clients and Investors. Clients in Uganda having a business idea they want to pursue. Investors having funds they want invest in Uganda.
Other brokers (companies and organisations) have tried to make a similar marketplace for microloans with varying success causing big losses to lenders. We will do better.
Some of our competitors have a business model where the broker makes a profit from a loan though the lender has a loss. That is not an equal partnership. In our model the full amount of all repayments from the client are directed to the lender until the principal is repaid. Then - if there is a profit from the loan to share - Sseguku and the lender split the amounts from the remaining payments. Sseguku has no earnings before the principal is repaid to the lender. The figure to the right gives an explained example.
Other brokers use local MFIs, so-called providers, as their representatives towards the clients. In this way the distance between the lender and the client becomes longer with more companies, interfaces, computer systems, people etc. involved. Reducing the number of links in the chain between the client and the lender makes the operation simpler and cheaper, makes communication easier and reduces the risk. In our model Sseguku is the only link between the lender and the client.
We keep lender funds in local currency Uganda Shillings (UGX) to focus on the results achieved in Uganda. Exchange rates are varying from day to day and if results continuously are communicated in lender currency achieved results in Uganda are blurred by the conversion. Only when the lender withdraws her or his earnings funds are exchanged to the currency preferred by the lender.