INTERNSHIP REPORT CONDUCTED AT CENTENARY RURAL

DEVELOPMENT BANK LIMITED KITGUM BRANCH,

KITGUM DISTRICT.

BY
ABER PATRICIA ONEN
14/U/9239/MFD/PD

AN INTERNSHIP REPORT SUBMITTED TO THE DEPARTMENT OF

ECONOMICS AND STATISTICS IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE AWARD OF A
BACHELOR OF MICROFINANCE DEGREE
OF KYAMBOGO UNIVERSITY

AUGUST 2016

DECLARATION
I, Aber Patricia Onen Registration Number 14/U/9239/MFD/PD hereby declare to the best of my
knowledge that the report herein presented is original and that the information in it has never
been submitted to any institution by anybody for any award of any nature.
Signature..
ABER PATRICIA ONEN

APPROVAL
1

Date.......

This is to certify that of Aber Patricia Onen Registration Number 14/U/9239/MFD/PD of

Kyambogo University carried out his internship training for a period of eight (8) weeks at
Centenary Rural Development Bank Kitgum Branch in Kitgum District. This report is a true
record of the work that she was able to produce and it is now ready for submission to the
examination board for assessment.
SIGNATURE...................
MR. WAFULA BENARD
(University Supervisor)

Date................................................................

DEDICATION
I dedicate this piece of work to my beloved parents for their tireless support, prayers and
encouragement.
I also dedicate this piece of work to the management of Centenary Rural Development Bank
Kitgum branch and its team for its tremendous help and moral support rendered towards me
during this internship period.

ACKNOWLEDGENT
First and foremost I am very grateful to the Almighty God for granting me the gift of life,
wisdom, health and knowledge which have highly contributed to the success of this report.
I exceedingly appreciate my University supervisors, Mr. Wafula Benard and Mr. Kabuye James
for their moral support, encouragement and advise during this internship period.
My sincere adoration and appreciation is extended to the loving team of Centenary Rural
Development Bank Kitgum branch especially Miss Wiajik Annet the branch supervisor, Mr. Olol
Misak the credit administrator, Mr. Omenya George Willy the accounts opening officer, Mr.
Adoki David, Mr. Ojok Robson, Mr. Mwebembezi Angello being great loan officers and the
support staff at the organization for having accorded attention and consideration

to the

internship introductory letter and granted me the opportunity to carry out my internship training
from your reputable institution and eventual development of this piece of work.
I also exceedingly extend my sincere and humble gratitude to Mr. Omeke Michael, coordinator
of Microfinance Kyambogo University and to the entire Department of Economics and Statistics
of Kyambogo University.
My close friends and course-mates of Kyambogo University; Kato Paul, Sharon, Allan, Jose,
Maria, Andrew, Edwin, James, Janat and many others cannot be left either. Thanks for your
cordial co-operation and family-like spirit that we have always shared and indeed without you, I
wouldnt be this worth

TABLE OF CONTENT

DECLARATION........................................................................................................................i
APPROVAL................................................................................................................................ii
DEDICATION...........................................................................................................................iii
ACKNOWLEDGENT..............................................................................................................iv
TABLE OF CONTENT.............................................................................................................v
LIST OF ACRONYMS...........................................................................................................viii
ABSTRACT...............................................................................................................................ix
CHAPTER ONE........................................................................................................................1
INSTITUTIONAL PROFILE...................................................................................................1
1.0

INTRODUCTION.......................................................................................................1

1.1

Name of the Institution................................................................................................1

1.2

Origin of the Institution................................................................................................1

1.3

Location of the Institution............................................................................................1

1.4

Mission of the Institution..............................................................................................1

1.4.1

Vision of the Institution.................................................................................................1

1.5

Aims of the Institution...................................................................................................2

1.6

Type of the institution...................................................................................................2

1.7

Services or products offered..........................................................................................2

1.7.1

Cente-Savings Accounts...............................................................................................2

1.7.2

Cente-Fixed Deposit Account.......................................................................................3

1.7.3

Cente-Junior Account....................................................................................................3

1.7.4

Cente-Plus Account.......................................................................................................3

1.7.5

Cente-Current Account.................................................................................................4

1.7.6

Cente-Supa Woman Account........................................................................................4

1.7.7

Cente-Micro Business and Commercial loan................................................................5

1.7.8

Cente-Youth Loan.........................................................................................................5

1.7.9

Cente-Personal Loan.....................................................................................................5

1.7.10

Cente-Land Loan...........................................................................................................6
5

1.7.11

Cente-Solar Loan..........................................................................................................6

1.7.12

Cente-Home Improvement Loan..................................................................................6

1.7.13

Cente-Agricultural Finance...........................................................................................7

1.7.14

Other services and products offered..............................................................................7

1.8

Institutional financial position and management..........................................................8

1.9

Organization Structure..................................................................................................9

1.10

Organizational culture.................................................................................................10

1.11

Employee Characterization.........................................................................................10

1.11.1

Manager.......................................................................................................................10

1.11.2

Banking Officer...........................................................................................................10

1.11.3

Loans Officer...............................................................................................................11

1.12

Ownership and Governance Profile............................................................................11

1.12.1

Shareholders (Governance profile).............................................................................11

1.13

The Institutional Regulation and Supervision..............................................................12

1.14

Administrative and Management Flow........................................................................12

1.15

Monitoring and Evaluation System..............................................................................12

1.16

The Institutional Self-sustainability and Outreach.......................................................13

1.16.1

Self-sustainability.........................................................................................................13

1.16.2 Outreach........................................................................................................................13
CHAPTER TWO.....................................................................................................................14
METHODS AND TECHIQUES USED IN THIS INTERNSHIP STUDY.........................14
2.0

INTRODUCTION.........................................................................................................14

2.1

Observation Method.........................................................................................................14

2.2

Interview Method............................................................................................................14

2.3

Literature Review............................................................................................................14

2.4

Recording and Data entry...............................................................................................15

2.5

Hands-on Practice Method..............................................................................................15

CHAPTER THREE.................................................................................................................16
SKILLS AND EXPERIENCE ACQUIRED..........................................................................16
3.0

INTRODUCTION..........................................................................................................16

3.1

Administrative and Management Skills...........................................................................16

6

3.2

Client Mobilization and Selection Skills........................................................................16

3.3

Loan Disbursement Skills...............................................................................................17

3.4

Loan Management skills.................................................................................................17

3.5

Loan Tracking Skills.......................................................................................................17

3.6

Loan Performance evaluation Skills...............................................................................18

3.7

Customer Care Skills......................................................................................................18

3.8

Internal Control Skills.....................................................................................................19

CHAPTER FOUR....................................................................................................................20
CHALLENGES, CONCLUSION AND RECOMMENDATIONS......................................20
4.0

INTODUCTION............................................................................................................20

4.1

Challenges on Technical Aspects...................................................................................20

4.1.1

Language barrier............................................................................................................20

4.1.2 The Equinox core banking system.................................................................................20

4.1.3

Concealing of Information.............................................................................................20

4.1.4

Poor Network................................................................................................................21

4.2

Conclusion....................................................................................................................21

4.3

Recommendations.......................................................................................................21

4.3.1

Financial Education.......................................................................................................21

4.3.2

Customer Care Delivery................................................................................................22

4.3.3

Emphasis on Leadership...............................................................................................22

4.3.4

Distributing Essential Information................................................................................22

4.3.5

Facilitating of Interns....................................................................................................22

LIST OF ACRONYMS
B/O

: Banking Officer

EFT

: Electronic Funds Transfer

CDS

: Central Depository System

CIR

: Cost to Income

DDA

: Direct Debit Agreement

HIL

: Home Improvement Loan

LMS

: Loan Security Margin

L/O

: Loans Officer

NPR

: Non Performing Loans

PAR

: Portfolio at Risk

RTGS

: Real Gross Time Settlement

SME

: Small Medium Enterprise

VALOS

: Veterinary Association Loan Scheme

ABSTRACT
This internship training was intended to equip and empower the intern with relevant and relevant
practical skills in the Microfinance industry , these ranging from client mobilization and
selection skills, administrative and management skills, loan appraisal and disbursement skills,
loan management skills, loan tracking, Internal controls, financial audits, financial accounting
and management, market research, record keeping, customer service, communication skills.
The internship training was carried out at Centenary Rural Development Bank Kitgum branch,
P.O.BOX 147 KITGUM along plot 7/8 Ogwok road, Kitgum sub county, Kitgum District. The
organization is endowed with a variety of products and services these are divided into deposit
products and credit products respectively; savings accounts, current account, fixed deposit
account, Cente-Junior account, Cente-Plus account, ATM service, SMS banking or centerline, PC
banking, processing foreign currency Cheques, foreign exchange buying and selling, money
transfers, correspondent bank addresses and swift codes, bank guarantors, micro business loans,
agricultural loans, animal traction loans among others.
During the internship training, the intern gained numerous skills as related to the field of
Microfinance due to the employment of various methodologies like observation of activities like
loan disbursement, loan tracking, loan management, loan recovery as done by the loan officers
(L/O) at the organization, interviewing of staff members, lectures mentored by chief teller,
accounts opening officer, IT supervisor and literature review among others.
Challenges faced were; language barrier, negative attitude of the mobilized masses, data
concealing by clients, too much bureaucracy during committee meetings, unorganized farmers
especially during times of appraisal. Therefore the intern concluded that the internship was a
success as the intern succeeded in applying the theoretical knowledge into practice.
It is recommended that Kyambogo University lengthens the duration of internship to enable its
students acquire more knowledge and skills. Internship programs should be introduced in the
first year of study so as to enable the student learn more from the organizations undertaking
different activities. This experience will give them ample experience over the three years or
more.

CHAPTER ONE
INSTITUTIONAL PROFILE
1.0

INTRODUCTION

This chapter presents a detailed framework of the organization where the internship training
transpired from. It stipulates a vivid background concerning the organization.
1.1

Name of the Institution

This institution is known as Centenary Rural Development Bank Limited.

1.2

Origin of the Institution

Centenary Rural Development Bank Limited is a commercial bank supervised and licensed by
Bank of Uganda (BOU). It was started as an initiative of Uganda National Lay Apostolate in
1983 as a credit trust and began operations in 1985. In 1993, it was a fully-fledged commercial
bank .The bank has reached a period of 33 years in operation since its inception and is the second
leading commercial bank as per 2016 and is also the leading microfinance and commercial loans
provider serving over 1000,000 customers and more. The bank offers micro, SME and business
loans of any choice across all sectors of the economy.
1.3

Location of the Institution

Centenary Rural Development Bank Limited Kitgum Branch is located in the Central village of
Kitgum Town Parish in Chua Sub County along Ogwok road plot 7/8 in Kitgum District.
1.4

Mission of the Institution

To provide appropriate financial services especially microfinance to all people in Uganda

particularly in rural areas, in a sustainable manner and in accordance with the law.
1.4.1

Vision of the Institution

To be the best provider of financial services especially microfinance in Uganda.

1.5

Aims of the Institution

To be the best provider of financial services especially microfinance in Uganda.

To provide appropriate financial services especially microfinance to all people in Uganda
particularly in rural areas, in a sustainable manner and in accordance with the law.
1.6

Type of the institution

Centenary Rural Development Bank Limited is a financial institution categorized under Tier
three by Bank of Uganda and its registered and licensed by Ministry of Tourism, Trade and
Industry under the financial institution Act, 2004.
1.7

Services or products offered

Centenary Rural Development Bank Limited offers mainly two products which are deposit
products and credit products (savings and loans). The deposit products include Cente-Savings
Account, Cente-Fixed Deposit Account, Cente-Junior Account, Cente-Plus, Cente-Current
Account, and Cente-Supa Woman Account. The credit products Cente-Micro Business and
commercial loan, Cente-Youth loan, Cente-Personal loan, Cente-Land loan, Cente-Solar loan,
Cente-Mortgage loan, Cente-Home Improvement loan, Agricultural loans Automatic loan,
Salary loan, Staff loan, Staff vehicle loan, Staff Real estate loan. These products respectively
have distinct features which render them convenient, attractive and affordable to the customers.
The products are further discussed in detail below;
1.7.1 Cente-Savings Accounts
They are designed for regular savers to enable them improve on their capital accumulation and
limit current consumption. The account is categorized with an opening balance of only UGX 10,
000 and 100,000 for corporate clients, a monthly levy of UGX 2000 charged on the account as
management fee. The benefits associated with this account include interest on outstanding credit
balances, joint savings are allowed, unrestricted cash withdrawals with minimum balance, access
to a variety of bank products like Cente-Mobile, PC Banking and loans.

1.7.2 Cente-Fixed Deposit Account

With this account a customers deposits are fixed for an agreed period of time to no withdrawals
made before the elapse of the period. Interest income is forfeited for cash withdrawals made
before the maturity period. The account earns interest at a higher rate than that applied on
savings account, the rates are negotiable, the account can be liquidated at any time on the clients
notice and the account can be pledged as cash collateral for loan. The accounts main features are
cash withdrawals are made only by the account holder and over the counter, can be held in both
local and foreign currency, a maximum amount to be fixed is open to the client and the minimum
amount to be fixed is UGX.300000.
1.7.3

Cente-Junior Account

The Cente-Junior Account is an innovative children savings account which is operated by the
childs parent or guardian. It is specifically targeted at children from the early age of toddlers up
to a maximum of 17 years. The Cente-Junior account provides the childs parent or guardian with
the opportunity to start saving early for the benefit of securing the financial future of the
children. This product is associated with attractive tiered interest rates of up to a 4% per annum,
no attached ledger fees or maintenance fees or monthly charges, free account statements, free
and automatic enrollment on Cente-mobile services, free and unlimited number of internal
standing orders or credit of accounts, free school fees Bank drafts, easy accessibility to the
Centenary Cente-Education loan of up to 150% of the credit balance on the account and a life
assurance policy cover for parents or guardians for accounts with a minimum credit balance of
UGX 200,000 covering permanent disablement caused by accident or death.
1.7.4

Cente-Plus Account

This is a special Savings Account aimed at motivating customers that fall under the microfinance
and retail segments to accumulate savings for financing future investments hence enabling them
to realize their dreams. The accounts main features are UGX 200,000 as an opening balance,
monthly maintenance fee of UGCX 2000 and a minimum balance of UGX 200,000. It also has
numerous merits attached to it such as unlimited cash withdrawals after completion of filling a
withdraw voucher, access to a variety of bank products like SMS banking and PC banking, the
account can be pledged as collateral in acquisition of a loan, interest is paid on monthly basis and
3

is very attractive, account balance can be topped up through making cumulative deposits, the
account also permits deposits through ways of cash, wire, cheques and any acceptable means of
deposit, enables the customer to finance productive assets or investments through savings
entirely or alongside some borrowing, the customer is also entitled to one free monthly bank
statement.
1.7.5

Cente-Current Account

It is a deposit account for transactions by cheques and enables the customer to draw on demand
when the account has sufficient funds. It can also be operated by individuals as a personal current
account and by Companies, Partnerships, Societies, Clubs and Associations as a non-personal
account. The benefits to this specific account are limitless as such access to a variety credit
products like micro business loan, agricultural loans and education loans, easy access to money
transfers, Cente-mobile and PC banking, the account can be held in both local and foreign
currencies, authority to operate the account can be pledged to third parties, the account an also be
operated as joint account, it also has unrestricted cash deposits, withdrawals and cheque deposits,
it also provides the customer with daily and mini-statements available on request.
1.7.6

Cente-Supa Woman Account

This is basically a special saving account designed to target women who advocate or desire to
save as individuals to improve their level of capital accumulation to boost their livelihoods and
businesses. It targets women between the ages of 21-65 years, it has an attractive interest of 2%
and interest is paid monthly, funds are freely transferred from Centenary bank, it enables the
women to access financial literacy training, business skills training, networking opportunities,
Cente-mobile services, individual life and medical insurance at a discounted premium rate, free
quarterly account statements and a developed relationship between the customer and the banking
officer.
In addition to the above account, there is a similar product under this category called the CenteSupa Group Account. This is also a special savings account targeted at formal and informal
women groups that desire to save jointly as a group with a common goal of improving their
livelihoods and households. It has an attractive interest rate on savings from 3%-5% which is
paid monthly (Tier 1-UGX 1M and above 3%, Tier2-UGX 10M and above 5%)
4

1.7.7

Cente-Micro Business and Commercial loan

The Cente-Micro business loan is a speedy short term loan which acts as working capital to
finance any business venture. Their benefit include being affordable to most low income earners
and rural poor, easy access to automatic loans and is the easiest way to access business funds.
The loan type has main features like a maximum loan amount of up to UGX 30M and a
minimum loan amount of UGX 100,000, the interest is charged on declining balance, it has
flexible and regular repayment plans, the minimum and maximum loan period are 3 and 24
months respectively.
The commercial loan is also called SME or Corporate loan, this loan is extended to SMEs and
Corporate engaged in profitable business activities in a variety sectors including trade and
commerce , transport and communication, industry, agriculture, animal husbandry, fisheries and
crop finance, Government sector, building and construction and the service sector. The loans can
be used to finance acquisition of business assets and infrastructure development. With this loan
interest is charged on reducing balance, minimum and maximum loan amounts are UGX 15 M
and UGX 3 billion respectively with a maximum loan period of up to 5 years.
1.7.8

Cente-Youth Loan

This is a special product designed to satisfy and enable the youth grow steadily. Basically it aims
at building the youth and targets those between 18 and 35 years, its a flexible short term loan
designed to support the innovative business ventures operated by the youth in areas like
manufacturing, agro-processing, agriculture, transport and ICT. The benefits attached to this loan
type include creation employment by helping the youth with working capital, flexible terms of
payment than other loans, moderately low interest rates and easy loan processing. The main
features are minimum and maximum loan amounts of UGX100, 000 and 500,000 respectively, a
maximum loan period of 4 years, interest is charged on declining balance and repayments made
through monthly, quarterly or staggered installment are based on the nature of business. The loan
can also be acquired on company and partnerships basis.
1.7.9

Cente-Personal Loan

This product is designed to better the life style of the customer through enabling the purchase of
assets, business startup any other productive venture, payment of medical bills and education. Its
5

benefits are manageable repayment installments based on the borrowers income, fast processing
of the loan, the loan finances numerous needs. The minimum loan amount is UGX100, 000 as for
the maximum loan amount is offered depending on the customers source of income, interest
charged is on declining balance, it also provides life insurance cover and the loan period is up to
5 years and the higher periods are negotiable.
1.7.10

Cente-Land Loan

This loan supports the purchase, survey and registration of land. The survey and registration of
land is undertaken by the Banks accredited land surveyors and that guarantees the delivery of
the customers land registration certificate to the Bank. The benefits of this product include no
monitoring fee, the registered mortgage is acceptable as collateral in acquisition of another loan,
flexible grace periods and repayment plans and it enables low income earners to acquire or
formalize their land ownership. In addition to the above, the product has features like a minimum
and maximum loan period of 3 and 36 months respectively, loan security margin (LSM) of
125%, insurance premium of 0.45%, an acceptance commission of 2%, interest charged is on
declining balance.
1.7.11

Cente-Solar Loan

Centenary Bank came up with this loan type to light up the homes or business premises of their
customers. It is a short term loan that helps customers to swiftly purchase and install solar power
at the homes or business premises. The products is characterized with a minimum and maximum
loan period of 6 and 24 months respectively, the loan amount does not exceed 70% of the
installation price of the solar equipment, interest charged is on declining balance, flexible and
regular repayment frequencies. It has benefits like fairly low interest rates, repayment plans are
made basing on the consumers income levels, loan period of up to 24 months and the
Government subsidies for clients located 100 M of further away from the grid.

1.7.12

Cente-Home Improvement Loan

This product helps the client renovate, construct or make improvements to both residential and
commercial properties. The benefits of this product include an attractive interest rate, easy and

fast way of improving homes, interest charged is on declining balance, a maximum loan period
of 36 months which enables easy repayment over the years, and it has regular and flexible
repayment plans. However the client has to be a resident in the branchs designated area of
operation; client must possess a source of income for servicing the loan installments and must
have a home which requires improvement to be able to access the loan.
1.7.13

Cente-Agricultural Finance

There are a number of products under this product and these include production loan, revolving
production loan, marketing loan farm asset or equipment loan.
The Production loan is designed to finance agricultural businesses, production and animal
husbandry. The loan period and repayment is flexible depending on the nature and season of
agricultural activity to be financed, attractive interest, grace periods, multiple disbursements
offered to accommodate different stages of the production cycle, the loan period for working
capital purpose is up to a maximum of 12 months and may exceed if for development purposes,
no principle is attached to the loan, interest charged is on declining balance, a minimum and a
maximum loan amount of UGX100,000 and UGX 8 Billion respectively.
The Revolving production loan enriches cultivation activities, purchase of farm assets. Credit
revolves for a maximum of 3years, a 10% increase in loan amount, loans are availed for each
crop season and repaid and no fresh credit appraisal is done thus reduced loan documentation
expenses.
With the Marketing loan post-harvest needs like processing, transportation, and storage are
catered for. The amount is limited to 60 and 50% for market value, a maximum loan tenor of 2
and 12 months for producer farmers and producers can avoid distress sales at harvest.

1.7.14

Other services and products offered

The bank has other numerous products and services it offers and these include overdraft,
temporary loan, Cent-lease, Special loan schemes such as Danida Agricultural loan, Danida
7

Business loan, Danida Investment loan, Veterinary Association Loan scheme (VALOS),
Collaborative Water and Sanitation Credit Scheme.
Money transfer services such as western union money transfer, telegraphic money transfers, real
gross time settlement (RTGS), electronic funds transfer (EFT), and inter-branch funds transfers.
Services like safe custody, automated bulk salary processing, standing orders, bank guarantees,
E-water payments, school fees payment services, cash payment option, EFT direct debit transfers
option, bonds dealership services, ATM services, SMS banking , PC banking.
1.8

Institutional financial position and management

Currently as at 19th day of July 2016, Centenary Bank Kitgum Branch has an estimated number
of depositors of 15,553 active clients and 1,758 estimated borrowers totaling up to 17,311
clients. Centenary bank has actual deposits of 11,502 million against budgeted 12,267 million
making a variance of (1,071). It has loan volumes of 5,232 million against budgeted 5,278
million and targeted 5,922 million. It has a profit of 70 million having a cost to income (Cir) of
94.23, loan quality arrears (par) of 7.43 and a lending ratio of 45.49. Centenary banks financial
position as at 31st December stood at the 2nd lending commercial bank in Uganda.

1.9

Organization Structure

This shows the hierarchy of the different staff organized into different ranks of importance,
supervisory and reporting relationship as shown below;
CENTENARY BANK KITGUM BRANCHS ORGANIZATION STRUCTURE

BRANCH
MANAGER

ASSISTANT MANAGER

CREDIT
ADMINISTRATOR

BRANCH SUPERVISOR

LOAN OFFICERS

OFFICE ATTENDANT

CHIEF TELLER

I.T SUPERVISOR, DRIVER

TELLERS

Reporting relationship
Supervisory relationship

BANKING OFFICER

1.10

Organizational culture

Centenary Bank promotes a working culture in accordance with the vision and mission statement
and also seeks to implement the highest standards of professionalism. All employees are rated or
rewarded primarily on the basis of their input and performance (productivity) as well as personal
conduct. The institution is an equal opportunity employer showing no preference or
discrimination against any employee or applicant on grounds of gender, religion, ethnic origin or
political affiliation.
The banks core values are fundamental drivers of the banks business in a highly competitive
environment and are cultural glue that unifies the Centre family and guides their unified efforts
to achieve higher heights.
1.11

Employee Characterization

Centenary Bank Kitgum Branch is characterized by competent and professional team as shown
below;
1.11.1

Manager

The branch manager holds a Bachelors Degree in Business studies, a Bachelors Degree in
Finance management, a Diploma in Commerce and a Diploma in Networking and software
application. Having tremendous experience as a loans officer and credit administrator, his duties
are quite esteemed and include general administration and management of the branch, attending
managerial trainings, mobilization at local Government levels and District level chairing loan
meetings, loan approval, authorization and advancement, communication for regional managers,
local leaders and solving insider problems, updating policy documents, preparing monthly
financial accounts, calling for auditing teams, reporting general performance of the team and
attending annual general meetings.
1.11.2

Banking Officer

The banking officer holds a Bachelors Degree in Procurement and Logistics Chain management,
Diploma in Computer science. The banking officer is tasked with heading general meetings on
Tuesday and weekly trainings on Friday, accounts opening, accounts storage, recording financial
transactions, issuing of ATM cards, handling transfer of accounts, issuing captured cards,
10

assisting clients with balance inquiry, issuing of cheque books and requesting for cheque books
on the clients behalf, accounts update, accepting clients complaints and recommendations, filing
documents and advisory role.
1.11.3

Loans Officer

The loans officer has a Bachelors Degree of Agriculture in Science, Certificate in Financial
Fraud and a Diploma in Information Technology (IT). The loans officer is situated in the loans
department being headed by a credit administrator and assisted by various loans officers of
different specialization such as salary loans officers and micro loans officers. The duties handled
include client mobilization, conducting appraisal exercises, presenting loan project proposals in
loan committees, preparing approved loans for disbursement, monitoring and evaluation of
performing loans, initiating recovery actions for defaulted loans, carrying out snap checks on
teller activities including ATMs in line with operations manual, engaging in required refresher
courses and attending organized training programs.
1.12

Ownership and Governance Profile

Centenary Rural Development was established by the Uganda National Lay Apostolate in 1983
as a Credit Trust, it developed strength in savings mobilization and as a result was registered as a
fully-fledged commercial bank in 1993.
1.12.1

Shareholders (Governance profile)

The Catholic Dioceses Uganda are all independent legal personalities as registered trusties of the
institution and are the main governing body owning 38.5%. The Uganda Catholic Secretariat is
the second leading governing and decision influencing party of the institution covering over
31.3%. Stichting HIVOS-TRIODOS FONDS is an investment fund managed by Triodos
investment management based in Netherland and it specializes in investing in microfinance and
trade. It owns 18.3% of the institution, International Solidarity for Development for investment
(SIDI) based in France is the fourth delegating and governing party of the institution owning a
11.6% and finally governed by the individual Ugandans who own 0.3% of the institution
influencing decision making.

11

1.13

The Institutional Regulation and Supervision

Centenary Rural Development Bank Limited is a commercial bank licensed by the Bank Uganda
and categorized under Tier I, being registered with the Ministry of Tourism, Trade and Industry
under the financial institutions Act 2004. It is therefore entitled to supervision, regulation and
monitoring by the Bank OF Uganda.
1.14

Administrative and Management Flow

Centenary Rural Development Bank Limited Kitgum Branch is managed by a board of members
consisting of the Catholic Church, Regional managers and the Branch manager among others.
This board charged with implementing deliberations of the main governing bodies from
Headquarters and also answerable to the quests of the branch employees as well as making sure
that the staff complies with business principles and core values like superior customer service,
integrity, teamwork, professionalism, leadership, excellence and competence so as to attain the
mission, vision, culture, business standards, objectives and goals. The branch manager is also
responsible for internal management of the branch and is assisted by the assistant manager or the
branch supervisor and the rest of the professional team helps in financial sustainability of the
institution.
1.15

Monitoring and Evaluation System

Centenary Rural Development Bank Limited is mainly monitored and evaluated by the Bank of
Uganda which takes care of providing auditors, evaluators and financial analysts who ensure the
proper operation of as institution as a commercial bank. However, the institution is also
monitored and evaluated by its own internal and external auditors, implementation of internal
controls like 4 eye principle, dual controls, transactions limit, snap checks, transactions review,
refresher courses and use of computer passwords, the Catholic Church, board of directors and
regional managers attached to various branches also influence the monitoring and evaluation of
the institution.

12

1.16
1.16.1

The Institutional Self-sustainability and Outreach

Self-sustainability

Centenary bank Kitgum branch mobilizes most of its loanable funds from its walk in clients and
outside clients who consist of employees from St. Joseph hospital, St.Bakita high school, Lamwo
local Government, Kitgum Uganda police force, AVSI foundation and the local peasants and
farmers. In addition, the institution charges various fees including un paid direct debit school
fees, postdated cheques, stop payments, mini statement, balance inquiry, ATM withdrawal
charge, closing accounts, account management fees, URA collection deposits, cancellation of
telegraphic transfers, restructuring fee, processing fee for commercial loans, western union
commissions abroad and within East Africa, charges on outward remittances and retrieval of old
cheques and vouchers.
1.16.2

Outreach

Centenary bank administers its operations from its headquarters in Kampala situated at Mapeera
House, plot 44-46, Kampala road and plot 2 Burton Street. The institution has multiple onsite
and offsite ATM services availed to its clients all over Uganda, numerous branches in Districts
like Kabale, Kasese, Bugiri, Fort Portal, Gulu, Hioma, Ibanda, Kyenjojo, Ishaka, Lira, Masaka,
Kanungu, Kyotera, Mbale, Mbarara, Mityana and so many others. The ability to avail its clients
with Inter-Switch services has paved way for improved networking and communication with
other commercial banks like post bank, KCB, Orient bank, Bank of Africa, Stanbic, Tropical
bank, DFCU bank and Finance Trust bank among others. In addition, the use of agents as middle
men to fuel savings mobilization, financing cancer runs, financing the transfer of clean water to
remote areas and donating to hospitals like St. Joseph in Kitgum, Partnerships with telecom
companies has enabled the growth of mobile banking especially with networks like MTN and
Airtel.

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CHAPTER TWO
METHODS AND TECHIQUES
2.0

INTRODUCTION

This entails the methods and technique used to accomplish tasks that were assigned to the intern
during the internship process. They include the following below;
2.1

Observation Method

This method was virtual in the interns training process especially because the intern lacked
applicable skills or hands on experience in most of the institutions activities. The intern used this
method to carefully watch and learn the on- going activities like client mobilization, loan
appraisal, loan disbursement, till cash management and documentation, file storage, security
storage, ATM snap checks, customer handling, document filing, bank statement interpretation
and use of various network systems like equinox core banking system and profits core banking
system. With this method, the intern was able to establish the branch work load especially by
observing the number of clients that the branch handled on daily basis and in addition the intern
was able to understand the activities of the institution.
2.2

Interview Method

The intern used this method to collect information concerning topics like Managerial skills,
Internal controls, loan tracking, General Administration, Institutional Profitability, Risk control
policies, security precautions, financial Accounting, Financial Audits and Market Research by
interviewing staff members. The intern also engaged in interviewing the clients through laying
out vivid queries concerning the bank products and services hence being able to understand the
institutions best practices, the client preferences, client loyalty, satisfaction and feedback after
consumption.
2.3

Literature Review

This method entails studying and reviewing past documents or literature concerning the
institution. The was able to acquire with permission documents like credit profile hand books,
financial reports, Friday weekly training reports, partnership deeds, audited financial statements,
project cash flow statements, local purchase orders, Profoma invoices for purchase of machinery,
14

bye laws, trading license documents, disbursement reports, loan application forms, accounts
opening forms, KYDs, committee meeting reports, recovery reports, loan portfolio reports and
end of month minutes and the Bank of Uganda annual reports on the monitoring and evaluation
of Tier three institutions.
2.4

Recording and Data entry

During the training period, the intern was able to collect, arrange and record information into the
system. This is because the institution engages in recording its financial transactions for safe
keeping using mainly the Equinox core banking system though it is transferring to the use of the
Profits core banking system. The intern also recorded short notes on activities that were carried
out in all weeks especially during morning brief meetings and Friday weekly trainings.
2.5

Hands-on Practice Method

This is the most reliable and effective means of learning various activities in a productive and
efficient manner. The intern had direct involvement in institutional activities like client
mobilization, conducting appraisal exercises, presenting loan proposals in loan committees,
accounts opening form completion preparing approved loans for disbursement, loan monitoring
and evaluation of performing loans, initiating recovery actions, carrying out snap checks, loan
underwriting and loan application form completion.

15

CHAPTER THREE
SKILLS AND EXPERIENCE ACQUIRED
3.0

INTRODUCTION

This chapter displays the interns experience basing on various skills acquired. It comprises a
detailed explanation and description of the interns training experience.
3.1 Administrative and Management Skills
In this section, the intern was guided through the chain command and reporting format therefore
the intern was actively engaged in accounts opening SSand mobilization in areas of Ayul,
Kitgum Global Business Institute and JAFLO enterprise limited as accompanied and taught
extensively by the marketing officer. With this the intern was able to learn aspects of deposit
mobilization like minimum and maximum opening balance needed for various accounts, improve
of communication skills, interpersonal skills, team work skills, effective time management and
most of all good customer service delivery which was door to deliver service and product
delivery. The intern attended morning brief meetings and Friday training which helped in
acquisition of knowledge on till cash management skills, bank guarantees and financial statement
interpretation skills. In addition, the intern attended end of month meetings, loan committee
meetings and recovery minutes meetings enhance acquiring the ability to in cooperate the 5Cs
namely character, collateral, capacity, cash flow and condition hence being able to identify credit
worthiness, loan amount to be disbursed, determine the loan period to render the client and
establish the repayment plans of the client basing on their cash inflow.
3.2

Client Mobilization and Selection Skills

In this section, the intern massively engaged in client mobilization and sensitization as guided by
both loan officers and the marketing team of the institution. Mobilization being an important
element of outreach maximization and self-sustainability is done in quite a massive manner
covering majority of the areas within and outside Kitgum district like Acholi PII, Palabeck,
Kitgum Matidi, Agago, Pajule and around within organizations like AVSI foundation, St. Joseph
hospital and with the Lamwo local Government. With such an experience the intern was able to
establish the banks quality of outreach, depth of outreach, breadth of outreach, length of
outreach and the cost of outreach. In addition, the intern was able to adhere the format of
16

mobilization done in the institution, carefully talk to clients hence proper service delivery and
listening to customer complaints as well as helping some clients to fill in account application
forms, loan application forms and deposit vouchers.
3.3 Loan Disbursement Skills
The intern mainly assisted in handling of micro business loans and agricultural loans. With
attending loan committees, the intern was able to attain a full study of the approved loans and
acquire loan approval skills through basing on the credit worthiness of the client by carefully
understanding the clients character, capacity, condition, collateral and cash flow. After this the
intern was taken through the process of data entry of the approved case into the Equinox core
banking system, with this system the client profile including contact information, business
location and repayment schedule was designed using the declining balance format. However, in
case a client needed a loan amount above 10M the case was forwarded to head office by the loan
officer in charge for approval therefore the intern acquired data entry skills, record keeping
skills, exposure to a new diverse core banking, requirements of obtaining a micro business loan
or agricultural loan, preparing repayment plans for clients and Managerial skills.
3.4

Loan Management skills

In this section, the intern engaged in loan management which comprises of appraisal,
disbursement, monitoring, tracking and recovery. Being mentored by professional loan officers,
the ability to in cooperate the 5Cs was inevitable as it helped the intern to establish the
relationship connected to client capacity, cash flow, character, condition and collateral to the loan
amounts requested by clients, credit worthiness and the repayment plan to design therefore the
intern acquired the ability to determine the clients credit worthiness. In addition, the process of
recovery enabled the intern to know the time frame accepted before sale of client property and
the duties of the bank auctioneer.
3.5

Loan Tracking Skills

The intern was able to practically take part in loan tracking. This involved making surprise visits
to the business premises and homes of clients to ensure proper use of the acquired loan and
reduce loan diversion hence the intern was able to acquire efficient monitoring skills and proper
customer care service as well as develop good client and employee relationships. In addition,
17

policies like putting holds on accounts belonging to clients who withdrew their salaries before
the loan installments were settled, pursuing clients guarantors to make sure that the clients paid
the loans fully and making phone calls to clients in a bid to remind them of their bank obligations
also helped the intern know the various strategies put in place to track the disbursed loans hence
attaining skills like communication skills, updating client profiles and files and knowing what
favorable loan repayment plans to subject to specific clients basing on their cash flow, collateral
and previous repayment behavior.
3.6

Loan Performance evaluation Skills

In this section, the intern was guided through the methods and techniques used to evaluate
disbursed loans. The intern was taught on how to analyze summaries of portfolio balance, these
include the principle balance, Arrear days 1-30. With this, the intern was able to understand the
basics of portfolio analysis which are mainly calculated using NPR and PAR. 1 day past
scheduled payment is attached to PAR whereas 30 days and 90 days past scheduled payment is
applicable to commercial and salary loans hence are under NPR. Therefore the intern was able to
determine whether the loans were performing well or bad and also differentiate between
outstanding loans, written off loans and bad loans.
3.7

Customer Care Skills

The intern was practically involved in physical interactions with the clients. This enabled the
intern to develop good customer relations hence being able to understand the needs of the clients,
responses of clients regarding the purchased products and services, level of satisfaction and
dissatisfaction of clients, customer complaints of being debited yet the ATM machine had not
debited their accounts, laxity in the till among tellers and Cent-Mobile connection problems.
With such responses, the intern was guided through policies and measures put in place to serve
dissatisfied clients like knowing that the client is the main reason for the banks existence
especially with the banks logo of Our bank, hence the intern was able to develop positive
working attitude skills, organization skills, interpersonal skills, communication skills and door to
door service delivery thereby attaining one of the core values of the institution being superior
customer service.

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3.8

Internal Control Skills

Here, the intern learnt various internal controls that the institution has put in place to reduce the
level of risk and these include the 4 eyed principle, dual control, transactions limit, transactions
review, snap checks, refresher courses like Basic Banking Module 1 and 2, Basic Credit
Management, Effective Self-Management, Introduction to Fundamentals of Agricultural
Lending, Sales and Marketing Training and Supervisory Management and use of computer
passwords. These techniques helped the intern to understand the merits of such controls in risk
management and assessment hence acquiring team work skills, professionalism skills and chain
of command in the institution.

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CHAPTER FOUR
CHALLENGES, CONCLUSION AND RECOMMENDATIONS
4.0

INTODUCTION

This chapter entails the challenges faced by the intern during the training process and the intern
also draws an overall conclusion to summarize the internship process. Being guided and
mentored extensively on the field of Microfinance, the intern designs general recommendations
to the institution.
4.1

Challenges on Technical Aspects

4.1.1

Language barrier

The inability to fully understand or communicate with the clients in a common language seemed
to compromise with the interns training process. This was mostly experienced in face to face
interactions like accounts opening, field mobilization in areas of Lamwo, Pandongwo and Chua,
appraisal exercises, recovery sessions and balance inquiry therefore attaining client information
and responding to the clients numerous needs became rather impossible in the first two weeks of
the interns training process.
4.1.2

The Equinox core banking system

The mere fact that most of the financial transactions of the bank are input into a core banking
system which is computerized and only accessed with the use of numerous passwords as a
precaution for safety documentation. The intern faced a problem of accessing the banking system
and understanding how the system operated hence unable to part take in computerized activities
or tasks like balance inquiry, loan disbursement and designed repayment schedules and
formulating summaries of portfolio balance.
4.1.3

Concealing of Information

The intern was limited to obtaining necessary information as needed by the internship study
especially by clients in the field who concealed personal information about their real collateral,
their business and home premises, contact information, presentation of wrong guarantors and
duplication of land deeds, purchase invoice of machinery. This made it hard for the intern to

20

make clear judgments during loan committee meetings, filling of both loan application forms and
accounts application forms hence continuous mistakes were committed by the intern.
4.1.4

Poor Network

The inconsistent internet connection was an impediment in accomplishing the tasks assigned to
the intern because it affected database entry hence the intern rely on the IT supervisor to address
such technical problems.
4.2

Conclusion

In conclusion the internship program that was conducted at Centenary bank Kitgum branch was a
general success as it helped the intern attain most of the objectives such as applying the
theoretical knowledge obtained in class and putting it in practice in the Microfinance field and
learning the basics of the course like savings mobilization, internal controls, loan appraisal and
disbursement, managerial and administrative skills, financial accounting and management,
market research and record keeping in which the intern acquired a variety of skills like cross
marketing skills, communication skills, team work, loan tracking skills and loan appraisal skills.
Despite problems such as language barrier, network problems, Equinox core banking system,
concealing of information and in proper identification of the intern which were handled asking
for interpretation from locals who understood a common language with the intern, seeking IT
personnel assistance and taking lessons concerning the core banking system so as to efficient in
assigned duties
4.3

Recommendations

This section depicts the views and recommendations that the intern saw fit to be addressed by the
institution during her internship period and these include the following;
4.3.1

Financial Education

Despite the fact that some of the branchs clients are financially literate concerning some of the
banks products, some of the clients are also financially illiterate. Therefore this reduces the speed
at which clients are served and satisfied, it also takes up both the clients time and the officers
serving them. As such, the banking and loans officers should effectively, extensively and

21

carefully educate the banks clients in a simple and easy language to understand thus proper
service delivery and reduction in staff attrition and an increment in client loyalty.
4.3.2

Customer Care Delivery

The concept of customer care and service in Centenary Bank is a fundamental driver for
financial sustainability and profitability. Hence the following principles can be incorporated in
managerial policies and these include service delivery to every customer one at a time, striving to
find out the customer needs and delivering them, building strong relationships with the
Centenary bank clients and staff themselves and most of all making the clients feel valued since
they are the reason for the banks existence.
4.3.3

Emphasis on Leadership

Effective leadership relies on mutually held core values that are adhered to in managements
behavior and decision making practices. Therefore there is need to embed these core values in
day to today work practices so as to influence the staffs way of decision making and behavior.
In addition, deploying organizational cultural values with tangible business concepts like
competence, professionalism and integrity can enable management boost business efficiency.
4.3.4

Distributing Essential Information

The clients ought to be availed with key documents such as loan repayment schedules, loan
completion forms in case they need to borrow from other institutions, charges attached to various
products and services and also some clients ought to educated on the importance of providing the
right documents like land deeds, lien and set off agreements, mortgage documents in acquisition
of loans so as to speed up loan processing.
4.3.5

Facilitating of Interns

Much as internship is for learning and benefits the intern more, it is paramount to assist the
interns meet their costs like transport, breakfast, lunch, medical care and a small package. With
this, the intern is more motivated and develops a positive attitude toward work which is
developmental to both the institution and student.

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APPENDICES

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