On March 15, the Uganda Investment Authority and the Bank of Uganda (central bank) conducted an informative workshop in the southwestern district of Rukungiri. The workshop aimed to raise awareness about affordable financing options for small businesses and commercial farmers.
The workshop highlighted two key financing facilities the central bank offers: the Small Business Recovery Fund (SBRF) and the Agricultural Credit Facility (ACF). The SBRF is designed to help micro, small, and medium enterprises recover from the Covid pandemic’s adverse effects. In contrast, the ACF is intended for commercial farmers.
Dr. Michael Atingi-Ego, the Governor of the Bank of Uganda, emphasized in a speech delivered on his behalf by Richard Byarugaba, the Executive Director of Finance, that small businesses are vital for Uganda’s economic growth. However, their significant challenge is accessing affordable credit, leading to establishment the SBRF and ACF.
The ACF, amounting to 800 billion shillings, enables MSMEs to purchase farming equipment, handle post-harvest processes, and add value, among other things. This fund can be accessed via financial institutions supervised by the Bank of Uganda, with a maximum repayment period of eight years and a maximum grace period of three years. The interest rate is set at 12 percent per annum.
The SBRF, valued at 200 billion shillings, offers affordable loans to small businesses affected by the measures implemented to control the coronavirus spread in Uganda. Eligible businesses include those operated by individuals, groups, partnerships, and companies, employing between 2-49 people and with an annual turnover of 10 to 300 million shillings, provided they demonstrate a capacity for recovery.
Major General (retired) Jim Muhwezi, the Security Minister, commended the Uganda Investment Authority and the Bank of Uganda for bringing awareness of affordable funding to the people of Rukungiri. He encouraged them to access the funds, invest wisely, and enhance their businesses.
Morrison Rwakakamba, the Chairman of the Uganda Investment Authority, stated that the workshop serves as an eye-opener for the business community and farmers in Uganda regarding government-offered funding opportunities.
Rukungiri, located near the eastern Democratic Republic of Congo, boasts infrastructure such as roads and electricity. Rwakakamba urged the business and farming communities to seize these opportunities and enablers for investment and business.
Geoffrey Kyomukama, the Rukungiri District Chairman, encouraged the people to use the funds to enhance commercial farming by investing in irrigation schemes, post-harvest handling, cold storage facilities, and produce transportation, among others.
Representatives from banks such as Stanbic, Centenary, Post, Equity, and Pride Microfinance addressed various financing issues raised by the participants.
The workshops on access to affordable financing, previously held in Arua and Mbarara, are being extended to other parts of Uganda to increase the uptake of the central bank-managed funds.
Bank of Uganda records indicate that only 3,744 beneficiaries have accessed the 800 billion shillings under the Agricultural Credit Facility so far, underscoring the need for more awareness about accessing the funds.