Pride Microfinance to trade as bank after securing licence from BoU

KAMPALA, April 30, 2025 – Pride Microfinance has officially transitioned into a Tier II credit institution and will now operate as Pride Bank Limited, marking a significant milestone in its evolution. The move ushers in a new era of expanded services, enhanced customer experience, and a deeper contribution to Uganda’s financial landscape.

The announcement was officially made at the Kampala Serena Hotel recently, following the acquisition of a Credit Institution Licence from the Bank of Uganda [BoU] on November 26, 2024.

“This journey has always been about the people we serve – from market traders to loyal clients across the country. As we become a bank, our mission remains unchanged: to serve better and to continuously enhance our offerings,” said Edward Nkangi, Executive Director of Pride Bank.

Reflecting on the institution’s transformation from a modest microfinance provider to a leading name in financial inclusion, Nkangi emphasised that the transition to Pride Bank is not simply a rebranding exercise but a strategic shift designed to broaden services and strengthen its impact on Uganda’s banking sector.

He commended the Bank of Uganda for its regulatory support and guidance, which he said had been instrumental in the institution’s journey, alongside other players in the sector.

“We are now positioned to offer a wider range of savings products, competitive credit facilities, and seamless digital banking services. Our customers can expect greater convenience, enhanced security, and the reassurance that their money is safe with us. Our focus remains on enabling financial growth for every customer,” Nkangi added.

He also announced the further digitisation of services, including agent banking, internet banking, and mobile loan products, all aimed at improving access to financial solutions.

Fred Jachan Omach, Chairman of the Board, highlighted Pride’s enduring commitment to financial inclusion. “From a single branch in Mbarara in 1995 to now 47 branches nationwide, our growth reflects a firm dedication to serving the underserved.”

He said the transition to Tier II banking would further enhance convenience and extend the bank’s reach. “We have encountered challenges, learnt valuable lessons, and remained resolute. As we step into this new phase, our aim is to foster trust, deepen relationships, and serve those often excluded from the formal financial system,” Omach said.

He described the acquisition of the Tier II licence as a major milestone, validating years of strategic planning and commitment.

“This licence empowers us to deliver a broader suite of financial solutions tailored to our customers’ evolving needs.”

Wilbrod Owor, Executive Director of the Uganda Bankers Association, congratulated Pride on the achievement.

“Securing a Tier II licence signifies increased capitalisation and readiness for more rigorous regulatory oversight. It reflects stability, resilience, and a strong operational footprint across 47 locations,” he noted.

However, Owor warned of the growing threat of fraud within the sector and urged Pride Bank to invest in robust cybersecurity systems.

“This industry is built on trust. While technology should increase access, it must also safeguard customers’ hard-earned money.”

Mackay Aomu, Director of the Non-Bank Financial Institutions Department at the Bank of Uganda, observed that Pride is only the second institution to transition from Tier III to Tier II status, after Equity Bank.

“Pride Bank is well-capitalised and well-positioned for growth,” said Aomu. “We’ve recently issued two Tier III licences to SACCOs, with a third on the way. Pride’s expansion enables deeper outreach to underserved communities, including village savings groups and smaller financial circles.”

He outlined the benefits of Tier II status, which include the ability to offer foreign exchange accounts, digital financial services, trade finance products; such as letters of credit and performance guarantees, and access to alternative funding sources.

“Pride can now introduce innovative products and integrate with payment systems, aggregators, and broader financial networks. This marks a transformative step – not only for the bank but for financial inclusion in Uganda.”

In Uganda, commercial banks are required to maintain a minimum paid-up capital of Shs 150 billion, while credit institutions must hold at least Shs 25 billion. These thresholds, increased from previous levels, came into effect on 30 June 2024. The BoU raised the minimum capital for credit institutions from Shs1 billion to Shs 25 billion as part of efforts to strengthen financial system resilience, promote stability, and enhance institutional capacity to meet the growing demands of the economy.

Analysts weigh in
Local and international analysts say the revised minimum capital requirements have led to improved capitalisation among smaller Ugandan banks. While the largest banks were largely unaffected, having already maintained capital buffers above the new threshold, the measure has helped ensure the sector remains robust in the face of loan quality and market risks.

“The 10 largest banks, which accounted for around 80 percent of sector assets at December 31, 2023, already had total equity exceeding Shs 150 billion when the new requirement was announced. These banks were able to comply simply by reallocating existing reserves, particularly retained earnings, into paid-up capital – without needing to retain additional profits or raise new capital,” one analyst noted.

In contrast, smaller banks met the new capital requirements through retained earnings and, in some cases, fresh capital injections from shareholders. Analysts say this has significantly strengthened their resilience, particularly given their often high single-obligor and industry exposures.

Pride Microfinance now joins other tier II financial institutions such as; BRAC Uganda Bank Limited; Yako Bank Uganda Limited, Opportunity Bank Uganda Limited, Guaranty Trust Bank Uganda, and ABC Capital Bank Uganda.

https://thecooperator.news/banks-issued-shs-1-5trn-in-loans-ahead-of-festive-season/

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