Stakeholders collaborate to deliver sustainable agricultural finance in Uganda

On May 17, 2023, the Danish International Development Agency (DANIDA) conducted a stakeholders’ appraisal of aBi Finance’s operations in Uganda. DANIDA is one of the agencies with a key stake in aBi Finance, others include the European Union, the International Fund for Developing Countries and the Government of Uganda.

The stakeholder organizations appraised aBi Finance’s performance over the last five years and also mapped a way forward for the future of aBi Finance and its role in advancing sustainable development in Uganda.

DANIDA is one of the agencies with a key stake in aBi Finance, others include the European Union and the International Fund for Developing Countries.

Other organisations that took part in aBi Finance’s appraisal included IFAD, Uganda Bankers Association, AMFIU, FITSPA, UMRA the Government of Uganda through the Ministry of Finance, Planning and Economic Development and the Global Green Growth Initiative, among others. More agencies will be called up to also appraise aBi Finance in the not-so-distant future.

Mona Muguma Ssebuliba, the Chief Executive Officer of aBi Finance, expressed her appreciation to the participants and emphasized the organization’s commitment to building upon its successful initiatives. “The next five years of aBi Finance’s operations will reinforce our achievements in agricultural guarantees, lines of credit, and grants management. We are dedicated to extending our financial services to individuals fleeing conflicts and settling as refugees and the attendant communities and ensuring their sustainability,” she said.

Ole Dahl Rasmussen, the Team Leader of Economic Affairs at the Danish Embassy in Uganda, explained the purpose of the meeting, stating, “We are here to review aBi Finance’s commendable work over the years and evaluate the Danish support for the next five years.

“Our goal is to assess the impact of aBi Finance’s interventions and their effectiveness in reaching the end users.” Rasmussen also highlighted the importance of collaboration between aBi Finance and the International Fund for Agricultural Development (IFAD) to provide financial services to those residing in refugee host communities. The meeting happened at the Kampala Serena Hotel.

Sauli Hurri, the senior regional technical specialist at IFAD, expressed his eagerness to explore collaboration with aBi and IFAD in wholesale lending to financial institutions for onward lending to smallholder farmers. “Through funds provided by DANIDA and channelled through Equity Bank, we aim to empower farmers and enhance their access to financial resources,” he revealed.

Camilla Valeur Nygaard, the chief consultant for the Danish Ministry of Foreign Affairs, emphasized the importance of understanding the needs of the stakeholders and addressing key issues that would benefit both end users and financial institutions. “By identifying these needs and focusing on crucial factors, we can create positive outcomes for all parties involved,” she said.

Wilbrod Owor, the executive director of the Uganda Bankers Association, commended the meeting’s timeliness and usefulness. He recognized the Bank of Uganda’s efforts to incorporate Environmental, Social, and Governance (ESG) principles, stating, “…the green agenda should permeate the entire banking sector, ensuring that our objectives and values align with sustainable development.”

Owor emphasized the importance of appreciating aBi Finance’s collaborative efforts and their potential cascading effects.

Jacqueline Mbabazi, the Executive Director of the Association of Microfinance Institutions of Uganda (AMFIU), discussed the impact of environmental factors on the microfinance sector. She stressed the need for increased awareness, saying that: “Climate change affects not only our clients but also their ability to actively participate in the sector. It is crucial to institutionalize Environmental, Social, and Governance (ESG) reporting and go beyond symbolic gestures like tree planting.”

Zianah N. Muddu, the Engagements Partner at FITSPA, shared insights from their agri-tech forum and efforts to avoid duplication through an agri-fintech database. Muddu highlighted the importance of collaboration, saying: “By mapping out all players and pushing various agendas, including the green agenda, we can enhance the effectiveness of our initiatives.”

Racheal Muhwezi, the Manager of Microfinance Institutions at UMRA, emphasized the need for technical assistance from aBi Finance to reach the last mile. She suggested leveraging mobile technology. “Enabling SACCOs and credit unions to access credit through USSD codes on basic mobile phones would foster financial inclusion. A Management Information System (MIS) would further broaden social inclusion,” she said.

Denis Mugagga, Head of the Climate Finance Unit at the Ministry of Finance, Planning, and Economic Development highlighted the ministry’s mission derived from the National Development Plan III (NDPIII). He emphasized the importance of private sector financing to achieve the 40% target for climate financing. “Crowding in the private sector is essential to reaching our goals. We are working with aBi Finance to develop a national green taxonomy, starting with agribusiness,” he said.

Dagmar Zwebe, the Country Representative of the Global Green Growth Institute (GGGI), acknowledged the challenges of finding bankable proposals in Uganda. However, she assured stakeholders of GGGI’s commitment to providing technical assistance to enhance proposal bankability.

“We are a friend of financial institutions and are delighted to offer our support to promote sustainable development,” said Zwebe.