By URN
Small and medium-scale enterprises have got a credit lifeline worth 16 billion Shillings from the African Guarantee Fund, as part of more efforts to strengthen businesses after the Covid-19 pandemic.
The African Guarantee Fund (AGF) was established in 2011 as a project of the governments of Denmark, Spain, France and Norway, represented by their development agencies, and the African Development Bank. The facility is a partnership with the Uganda Development Bank which will also manage it including identifying and advising the beneficiaries as well as disbursing it.
The facility mainly targets youth, women and green enterprises and, according to Sylver Kyeyune, the UDB Director Risk, these segments of the business community find it hard to access credit on the open market due to the requirements, mainly collateral.
He says this is why the Bank will guarantee up to 50 per cent of the loan amount, while green and women enterprises will have their loans covered up to 75 per cent by UDB.
UDB emphasises that it will continue focusing on its priority areas when supporting the private sector, in agriculture, human capital development, ICT and innovation, industry and tourism. The loans will be given out within UDB’s interest structure of between 10 and 12 per cent.
UDB Chief Executive Officer Patricia Ojangole says that this is part of the Special Programs they launched in 2022 mainly targeting women, youth and SMEs, after realizing that these categories could no ably access credit on the open market. She says that since then, they have reached out to 250 entrepreneurs, but adds that the number would have been even bigger if they had got partners before.
The two recognize the importance of the target sectors to the contribution of the economies in Africa and Uganda in particular, but also that they have special challenges.
