KAMPALA – The East African Development Bank (EADB) has launched a landmark UGX68 billion funding initiative aimed at empowering small and medium-scale enterprises (SMEs) in Uganda. This ambitious program is expected to provide affordable credit to over 1,500 SMEs, with a special focus on those operating in the agricultural sector.
According to Ramadan Goobi, the Permanent Secretary in the Ministry of Finance, Planning and Economic Development, enabling SMEs to thrive is a collective responsibility that has far-reaching benefits. “Bridging the financial gap for SMEs requires collective action,” he emphasized, highlighting the importance of collaboration between government, development partners, financial institutions, and the private sector.
Goobi praised EADB’s commitment to supporting SMEs, noting that their efforts would contribute significantly to Uganda’s economic growth and development. “This financing is a milestone that will offer affordable credit to over 1,500 SMEs, a huge boost to the sector,” he said.
Vivienne Yeda, the EADB Director General, noted that SMEs are the backbone of Uganda’s economy, accounting for 70% of GDP and creating close to 90% of all jobs. Despite their significance, SMEs face substantial challenges, particularly in accessing affordable financing, which hampers their growth.
To address this, EADB partnered with Centenary Bank, Housing Finance, and Opportunity Bank to provide USD15 million (approximately UGX68 billion) in funding. This initiative aims to reach over 1,500 SMEs across the country, with a focus on those operating in the agricultural sector and its value chain.
The program operates throughout the agricultural value supply chain, from input providers to farmers to agricultural traders and buyers, promoting agricultural investment and providing sustainable income to rural communities. This ultimately assists poverty reduction and food security.
EADB’s partnership with local financial institutions provides loan facilities to SMEs and technical support to ensure businesses remain innovative and progressive. Capacity-building programs will enhance financial literacy and management skills for SME owners, enabling them to make informed decisions and scale their businesses.
Centenary Bank’s Managing Director, Fabian Kasi, praised the partnership, highlighting its positive impact on providing affordable credit to SMEs, particularly those in agriculture. “Our partnership with EADB has been instrumental in providing affordable credit to SMEs,” he said.
Housing Finance Bank Managing Director, Michael Mugabi, echoed similar sentiments, emphasizing the importance of SMEs in job creation, innovation, and Uganda’s GDP growth. “This line of credit reinforces our shared commitment to supporting SMEs,” he stated.
Opportunity Bank’s CEO, Owen Amanya, highlighted the transformative potential of the SME sector, particularly for women. “SMEs hold enormous promise for Uganda’s socio-economic advancement,” he said. “Access to affordable credit is a true game-changer.”
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 EADB’s commitment to supporting SMEs and promoting economic growth in the region.
This funding initiative is a significant boost for SMEs in Uganda, expected to drive economic growth, job creation, and poverty reduction. 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.
The initiative’s impact will be felt across various sectors, including:
Agriculture, where SMEs will receive support to enhance productivity and improve quality.
Rural communities, where SMEs will provide sustainable income and employment opportunities.
Women-led enterprises, which will benefit from access to affordable credit and capacity-building programs.
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.
