Objectives of Establishing Baitulmal Uganda
- Establish Islamic financial cooperatives/ BMT Groups to enhance the socio-economic development of the active poor and productive entrepreneurs.
- Extend financial services, service activities, and non-financial direct assistance to Micro, Small, and Medium Enterprises (MSMEs) at the grassroots.
- Enhance Islamic Finance Institutionalization in the financial sector and the Community at large.
How Objectives are achieved/ Design
Beneficiaries/ Core Targets
Groups of Women, Youth, People With Disabilities (PWDs).
Small and Medium Enterprises (SMEs) of productive Entrepreneurs.
Legal Status
Groups of Microenterprises (MEs) are entities registered with the Ministry of Trade, Industry and Cooperatives.
SMEs are entities registered with the Uganda Registration Services Bureau (URSB).
Ownership
VGroups are owned and governed by members in the community.
SMEs are owned by productive Entrepreneurs in the community.
Design
Vertical expansion; provide funding support to the active poor through BMT Groups and the productive entrepreneurs.
Horizontal expansion; institutionalize Islamic financial services by widening the products, institutions, and innovation.
Structures Used
Map a BMT Group (of at least 7 members) at every Mosque. UMSC has 13,000 Mosques.
SMEs shall be identified through other Muslim administrative structures (Regions, Muslim Districts, and Counties).
Services Provided to Beneficiaries
Financial services; depository (on Wadi’ah/safe custody basis) and financing (on Musharaka/ Profit and Loss Sharing basis).
Service activities; Kafalah (guarantee) to reduce dependence on Collateral, Wakalah (agency), and Hawalah (transfer of debt).
Non-financial direct assistance; markets linkage, Business Development Services (BDS), training, social development programs, Shari'ah compliance support, and other Technical Assistance (TA).
Sources of Funding
Zakat funds;
1)Lobby Zakat collecting agencies to channel productive Zakat to the active poor and productive entrepreneurs through Baitulmal.
2)Baitulmal Uganda multiplies the productive Zakat by financing MEs (for the active poor) and SMEs (for the productive Entrepreneurs).
Government, philanthropic organizations, financing and development partners, commercial banks, and social venture capital firms among others.
Models Adopted
Establish BMT Groups at the Mosque level, which allows the Mosque to mobilize funds and disburse loans, under the control of the Head office (Baitulmal Uganda).
The franchise or autonomy model invites various Mosques and other institutions to establish BMT Groups. The Head office (Baitulmal Uganda) establishes a BMT network to facilitate inter-BMT members' borrowing and loan syndication, and deposit placement.
Developing strategic alliances with Muslim-based institutions such as; schools, universities, and businesses to establish BMT Groups for their communities.