Managing Director of Uganda Development Bank, Patricia Ojangole, Group Chief Executive Officer African Guarantee Fund, Mr. Jules Ngankam exchange agreement after signing during the ceremony at Kampala Sheraton Hotel.
Uganda Development Bank (UDB), the country’s national Development Finance Institution, has signed a Loan Portfolio Guarantee agreement with the African Guarantee Fund (AGF), to scale up lending to SMEs, Women, Youth-affiliated businesses, and green projects in Uganda with credit worth UGX16 Billion (approx. USD5 million).
The announcement was made during an agreement signing ceremony that was held at the Sheraton Kampala Hotel.
Patricia Ojangole, the UDB Managing Director while re-affirming the partnership, said UDB and AGF are working as strategic partners to facilitate and accelerate the development of underserved business segments in key growth sectors including agriculture, manufacturing, and tourism among others.
“SMEs, Youth, and Women play a crucial role in Uganda as catalysts of socio-economic development. They make tangible contributions to solving the country’s most complex and intractable challenges like unemployment and expansion of the tax base. However, access to affordable financing remains one of their major challenges. As actors charged with the responsibility to appreciate our challenges and to design appropriate interventions that address them, we have today formed this formidable partnership with AGF to establish a sustainable solution that responds to these challenges,” she said.
As a Development Bank, UDB is one of the key entities involved in implementing the interventions outlined in Uganda’s National Development Plans (NDPs), particularly those that relate to the provision of affordable finance to facilitate and catalyze private sector investment and support the growth and development of SMEs.
Speaking during the signing ceremony, Jules Ngankam, AGF Group CEO hailed UDB as a key player in promoting private sector development. “Our partnership with Uganda Development Bank further increases our footprint and impact in the country. By supporting UDB to accelerate SME financing, we envision several development impact indicators, including increasing the number of people employed/engaged in businesses directly or indirectly and growth of enterprises from one stage to another: e.g., from Small to Medium enterprises, through financing and impact of capacity development on their operations and governance,” he said.
Under the arrangement, AGF will also provide tailored facilities specifically the green guarantee for SMEs investing in low carbon and climate resilient businesses; and the African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) Guarantee for Growth program to support women-led and owned businesses. To accompany the guarantee partnership, AGF is at an advanced stage in structuring a Capacity Development support that will enhance UDB’s capacity to foster financial inclusion for the youth, women, and green SME projects.
In 2021, UBD tailor-made a specific intervention aimed at supporting the growth of SMEs, women-led/owned enterprises, and youth entrepreneurs through bespoke financial and non-financial solutions. Given that the SME sector accounts for about 90% of Uganda’s private sector and generates over 75% of the country’s GDP, the Bank’s value proposition seeks to propel these groups in all sub-regions of the country towards higher business assets and revenues, while also creating new employment opportunities and redistributing wealth for balanced development.