Uganda Microcredit Foundation Ltd (UMF) is an indigenous Micro Finance Company that was incorporated and started operations in 2008 in Uganda.
The advantages of group lending over individual lending include:
the use of peer pressure as a substitute for collateral, the reduction in transaction costs by gathering as a group, and the utilization of hierarchal structure to learn more about clients.
On the flip side, disadvantages include the higher likelihood of group failure in the event of a single default, higher training costs, and a higher financial responsibility for others in a group.
