KAMPALA – Uganda’s Ministry of Finance, Planning and Economic Development Permanent Secretary Ramadan Goobi has emphasized the importance of providing affordable capital to small and medium scale enterprises (SMEs) to drive economic growth. Speaking at the East African Development Bank’s (EADB) signing ceremony, where three local banks received UGX68 billion to lend to grassroots SMEs, Goobi stressed the collective responsibility to support SMEs.
“This financing is a milestone that will offer affordable credit to over 1,500 SMEs, a huge boost to the sector,” Goobi said, commending EADB for making this possible. EADB Director General Vivienne Yeda noted that SMEs contribute significantly to Uganda’s economy, accounting for 70% of GDP and creating 90% of all jobs. However, they face substantial challenges, particularly in accessing affordable financing.
To address this, EADB partnered with Centenary Bank, Housing Finance, and Opportunity Bank to provide USD15 million (UGX68 billion) in funding, focusing on agricultural sector SMEs. This initiative brings EADB’s local partner financial institutions in Uganda to five, including FINCA and Opportunity Bank.
The program, supported by KFW, operates throughout the agricultural value supply chain to promote investment and provide sustainable income to rural communities, ultimately reducing poverty and improving food security. By targeting SMEs in the agricultural sector, EADB aims to enhance productivity, improve quality, and increase competitiveness.
EADB’s partnership offers technical support and capacity-building programs to enhance financial literacy and management skills for SME owners. These programs cover essential business skills, financial management, and market access strategies. Managing Directors of Centenary Bank, Housing Finance Bank, and Opportunity Bank praised the partnership, highlighting its impact on job creation, innovation, and GDP growth.
Over the past 11 years, EADB’s SME funding program has channeled USD61 billion in affordable credit to thousands of SMEs across Uganda, Kenya, Tanzania, and Rwanda. This initiative demonstrates the importance of collaboration between government, financial institutions, and development partners to support SMEs and drive economic growth.
The partnership aims to empower women in SMEs, enabling them to uplift their families and build generational wealth. Access to affordable credit is a true game-changer for these entrepreneurs. With EADB’s continued support, local banks are helping enterprises that previously struggled to access financing.
This collaborative effort will foster entrepreneurship, resilience, and socio-economic advancement in Uganda’s communities. By providing affordable capital and technical support, EADB and its partners are bridging the financial gap for SMEs and unlocking their potential for growth and development.
Key beneficiaries of this initiative include:
- Smallholder farmers
- Agricultural processors
- Traders and suppliers
- Women-led enterprises
- Rural communities
By supporting SMEs, EADB and its partners are contributing to Uganda’s economic growth, poverty reduction, and improved food security. This partnership serves as a model for future collaborations, demonstrating the power of collective action in driving economic development.
As Uganda continues to navigate economic challenges, initiatives like EADB’s SME funding program will play a critical role in promoting entrepreneurship, job creation, and sustainable growth.