The Bank of Uganda and the Ministry of Finance are in the process of reforming the Small Business Recovery Fund (SBRF), which was established to support enterprises affected by the economic disruptions caused by the COVID-19 pandemic.
The SBRF complements the Agricultural Credit Facility (ACF), a ten-year-old initiative designed to improve access to credit for farmers.
Established in October 2021, the 200 billion Shilling SBRF is a partnership between the Ministry of Finance, through the Bank of Uganda, and financial institutions regulated by the central bank, referred to as Participating Financial Institutions (PFIs). These PFIs co-finance the loans on a fifty-fifty basis with the government.
The fund was designed to assist small and informal enterprises that could not qualify under existing financial frameworks. However, progress has been slower than expected. As of June 2025, only 3,640 applications had been received, valued at 72 billion Shillings, with 59 billion Shillings disbursed.
This performance has drawn concern from the Uganda Bankers Association and business community leaders, who argue that disbursements remain low compared to the high demand for micro and small business capital.
In contrast, the Agricultural Credit Facility, established in 2009, has recorded 15,346 loan applications, of which 7,666 have been approved. A total of 1.23 trillion Shillings has been disbursed through its 20 participating institutions.
Despite the SBRF’s relatively low interest rate of 12 per cent, the recently concluded National Budget Consultations revealed that many potential borrowers still perceive the conditions as stringent and inaccessible.
Joseph Bbaale Bwanika, the deputy Mayor of Makindye Division, noted that many borrowers are discouraged by delays or are told the funds are unavailable, challenges he says only large investors can overcome.
Some leaders called for the creation of a dedicated Agricultural Bank, arguing it would better serve farmers than the current ACF structure. Paul Mugambe, the Mayor of Nakawa Division, said commercial banks are primarily profit-driven and therefore ill-suited to manage specialised agricultural lending.
Jean Martina Ainembabazi, the Credit Appraisal Officer at the Bank of Uganda, refuted claims that the SBRF is designed for big people, noting that three-quarters of the beneficiaries are small and micro enterprises, each accessing loans of 20 million Shillings or less.
She also dismissed reports that commercial banks hide the funds or instead market their high-interest products, stating that the Bank of Uganda has been actively sensitising communities across the country on how to access the facility. She equally appeals to anyone who encounters challenges with a financial institution regarding the fund to report the matter directly to the Bank of Uganda.
On why agricultural funds are not managed by a standalone bank, Ainembabazi explained that the facilities were designed to address the entire agricultural value chain and that working through regulated financial institutions ensures compliance and accountability.
Under the proposed reforms, the SBRF will be renamed the Small Business Fund (SBF) to reflect a broader mandate that includes newer enterprises established after the pandemic. The revised framework will allow beneficiaries to apply for more than one loan, unlike the current single-loan limit. The eligibility criteria, including the number of employees per enterprise, will also be reviewed.
Ainembabazi added that the reforms will expand participation to include Tier Four financial institutions, mainly SACCOs, to increase accessibility, especially in rural areas.
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