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EADB launches UGX68 bn fund for Ugandan SMEs

Peter 1st Oct, 2024 Economy Business Edge Reporter
EADB launches UGX68 bn fund for Ugandan SMEs

Finance Permanent Secretary Ramadhan Ggoobi (4R) and EADB Director General Vivienne Yeda (4L), pose with bank CEOs at the ceremony in Kampala.


The East African Development Bank (EADB), the region’s leading development financial institution, has launched a new $15 million (about UGX68 billion) fund to support the growth of 1,500 rural-based Small and Medium Enterprises (SMEs) in Uganda.

The money is to be channeled through three commercial banks – Centenary Bank, Housing Finance Bank, and Opportunity Bank.

Speaking as chief guest at the signing ceremony in Kampala on September 27, Ramadhan Ggoobi, the Permanent Secretary in the Ministry of Finance, Planning and Economic Development and also Secretary to the Treasury, saluted EADB for the initiative, saying enabling SMEs to thrive has numerous benefits.

  • “Bridging the financial gap for SMEs requires collective action. 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.

Development Financial Institutions (DFIs) are specialized entities designed to promote economic development by providing funding to initiatives that may not be attractive to local commercial banks. They tend to take on higher risks than commercial banks, enabling investments in sectors or regions that may be deemed too risky for private investors.

With financial support from KfW, a German development bank, EADB’s main objective is to stimulate economic growth, create jobs, and reduce poverty by supporting large-scale infrastructure projects, grassroot SMEs, and social enterprises.

  • Vivienne Yeda, the EADB Director General, said the SME sector deserves their support because it plays a crucial role in the economic growth of Uganda - contributing to 70% of GDP and creating close to 90% of all jobs. She said this new fund aims to reach over 1,500 SMEs across the country, with a special focus on those operating in the agricultural sector and agri-business.
EADB launches UGX68 bn fund for Ugandan SMEsMs Yeda commended Ugandan financial institutions for setting the benchmark structure that has been adopted by other EAC member States.

Yeda said EADB’s partnership with Ugandan financial institutions not only provides loan facilities to the ‘last mile’ business enterprises but also offers technical support to ensure that these businesses remain innovative and progressive.

“I am inspired by the catalytic approach we have adopted to support SMEs through improved access to finance and technical assistance to financial institutions here in Uganda,” she said.

The three new partner banks now bring the total number of EADB’s local partner financial institutions in Uganda to five, in addition to FINCA and Finance Trust Bank, which came on board more than five years ago.

Yeda saluted the partners in Uganda over the last five years, saying the successful collaboration had been pivotal to structuring a framework that has been rolled out to the rest of the region especially in Rwanda and Kenya, and in Tanzania soon.

  • Speaking at the same event, Ann Nakawunde, the Finance Trust Bank managing director, noted that for over ten years of their collaboration with the EADB, they had received over UGX20 billion, which they had disbursed to more than 6,000 customers and the results were “exceptional.”
  • Robert Kakande, the FINCA managing director, said their five-year partnership with EADB had seen their agricultural lending rise to 40%, with over UGX60 billion disbursed so far to thousands of SACCOs at the grass roots.

Fabian Kasi, the Centenary Bank managing director, said with the new financing, they are set transform the lives of thousands of small business owners especially those operating through SACCOs at the grass roots.

As part of the partnership, the local financial institutions are also required to offer financial literacy and business development advisory services to help the businesses improve their operations, governance, and sustainability practices.

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