Abstract
Centenary Rural Development Bank is a commercial bank providing deposit, credit and money transfer services to poor clients in Uganda. Established by the Catholic Church as a trust fund in 1983, it developed strengths in savings mobilization but performed poorly as a financial intermediary. This article describes Centenary'sprogress since reform in the early 1990s when it was transformed into a commercial bank. With donor support, the bank introduced a highly effective individual lending technology, including a computerized loan-tracking system, and staff and customer incentives encouraging timely repayments. This has resulted in an impressive portfolio-in-arrears ratio of around three per cent. Since 2002, the bank has started to overcome its quality-vs-productivity dilemma, by shifting incentives from repayment towards disbursement, and adding mesofinance for small and medium entrepreneurs. This move has substantially contributed to both the bank'ssustainability and its outreach to poor savers.
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