Women-led businesses and entrepreneurs are set to benefit from 425.5 billion from the European Investment Bank (EIB) and Centenary Bank.
The funds are aimed at empowering micro entrepreneurs to break down barriers to trade and growth in often neglected areas of the community and increase access to credit in areas of microfinance and small and medium enterprises.
According to Fabian Kasi, the Managing Director of Centenary Bank, the resources were pulled together following the partnership between EIB and Centenary Bank. Under the partnership, each bank will contribute €500,000 in the form of a loan and €500,000 from Centenary Bank.
The bank is currently giving out over Shs3 trillion in loans every year; however, over 20% of them go to agriculture. The bank will issue 1.9 million loans to small, growing businesses and microenterprises, with a specific focus on employing almost one million women or women-run businesses, and 1.2 million loans to microenterprises in rural areas.
The Uganda Bureau of Statistics (UBOS) 2023 report indicates that the agricultural sector remains the largest employer with about 70 percent of the population, accounts for approximately 25 percent of the GDP of this country and contributes 35 percent of the export earnings as of the end of the year 2022–2023.
“The bank has stepped up its environmental, social, and governance practices to embrace more climate adaptation and mitigation solutions. With its renewable energy products, which include solar housing and irrigation loans, eco stoves, and poor connections, the bank will support climate-focused businesses that improve agriculture production and processing, as well as promote green, efficient technologies to conserve the environment,” Kasi said.
Edward Claessen, the head of the regional hub for EIB, said strong financial intermediaries are crucial to addressing market challenges and creating optimal investment situations across the region.
He said the transaction aligns with Global Gateway priorities as it will be channeled to microfinance, micro, and SME clients in Uganda.
“The loan will be particularly aimed at female microentrepreneurs and microenterprises; more than 50% of the loan will go to such borrowers. We believe this loan goes a long way towards addressing those challenges, and with the support of micro and small enterprises, this operation will contribute to poverty reduction,” he said.
