EADB provides Shs68bn to 1,500 small enterprises

The program, supported by KFW, spans the entire agricultural value chain, from input providers to farmers and traders

Kampala, Uganda | THE INDEPENDENT | East Africa’s regional development finance institution, East African Development Bank, has unveiled a Shs 68 billion (USD 15.8 million) fund to support Small and Medium Enterprises (SMEs) across Uganda through five local financial institutions.

The initiative is expected to impact over 1,500 SMEs, with a focus on sectors like agriculture and its value chain. The beneficiary financial institutions include Centenary Bank, Housing Finance Bank, Opportunity Bank, FINCA Uganda, and Finance Trust.

The support is part of EADB’s broader commitment to enhancing the growth and sustainability of SMEs in East Africa, which play a pivotal role in driving the region’s economies.

Ramadan Goobi, permanent secretary in the Ministry of Finance, Planning, and Economic Development, emphasized the importance of collective action in bridging the financial gap for SMEs.

Speaking at the signing ceremony on July 27, Goobi stressed that supporting SMEs with accessible capital is crucial for their growth and the overall development of the country.

“We must continue working hand-in-hand with development partners, financial institutions, and the private sector to create a business environment where SMEs can truly thrive,” he said.

EADB Director General, Vivienne Yeda, highlighted the critical role SMEs play in Uganda’s economy, contributing 70% of the GDP and creating nearly 90% of jobs.

However, she noted that many SMEs face significant challenges, particularly in accessing affordable financing due to high-interest rates, stringent collateral requirements, and limited credit availability. These obstacles, she said, restrict their ability to expand, invest in new technologies, and explore new markets.

“…by addressing SME financial needs, we are directly contributing to poverty reduction and food security,” Yeda said.

“The program, supported by KFW, spans the entire agricultural value chain, from input providers to farmers and traders,” he said.

The partnership doesn’t just stop at providing loans. Yeda emphasized the bank’s holistic approach, which includes technical assistance to ensure that these businesses remain innovative and sustainable.

Capacity-building programs will also be offered to help SME owners improve financial literacy and management skills, empowering them to make informed decisions and grow their businesses for long-term success.

Local bank leaders also acknowledged the transformative impact of EADB’s funding.

Fabian Kasi, managing director of Centenary Bank, said that the initiative has been instrumental in providing affordable credit, especially to SMEs in agriculture.

Michael Mugabi, managing director of Housing Finance Bank, echoed this, highlighting that the line of credit will fuel entrepreneurship and innovation, vital components of Uganda’s economic growth.

Owen Amanya, CEO of Opportunity Bank, emphasized the focus on empowering women in SMEs, enabling them to uplift their families and contribute to generational wealth.

EADB’s SME funding program has provided over US$61 billion (approx.Shs228tn) in affordable credit to thousands of SMEs across East Africa over the last 11 years.

Beyond SME financing, the bank also supports projects in environmental conservation, renewable energy, climate resilience, and sectors such as infrastructure, tourism, and agribusiness.

This latest investment is a testament to EADB’s commitment to driving sustainable economic growth, fostering resilience, and supporting the backbone of Uganda’s economy—its SMEs, executives say.