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European Investment Bank Boosts Ugandan Micro-businesses with €100 Million Investment

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3rd Uganda-EU Business Forum opens March 5, 2024
PHOTO —
EEAS – European Union


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The European Investment Bank (EIB Global) and Centenary Rural Development Bank Ltd (“CERUDEB”) have joined forces to provide over 426 billion Ugandan shillings (€100 million) to support private sector enterprises in Uganda, with a special focus on female borrowers and microenterprises situated in rural areas.

This investment marks the EIB Global’s largest-ever microfinance loan to any country within the African, Caribbean, and Pacific (ACP) regions. The collaboration between these two financial institutions was announced ahead of the formal signing of the agreement during the EU-Uganda Business Forum, graced by the presence of Uganda’s President Museveni.

The ultimate beneficiaries of this investment are micro-entrepreneurs or micro-enterprises with less than 10 full-time employees. The investment aims to facilitate lending to financially underserved entrepreneurs in rural areas, particularly as their businesses strive to recover from the impacts of the COVID-19 pandemic. Notably, 60% of the funding will be directed towards projects in rural areas outside the capital city of Kampala.

CERUDEB commits to allocating at least 50% of the financing to support women-run or women-owned businesses, aligning with the EIB’s 2x Challenge criteria and SheInvest initiative. This move comes in response to findings from the United Nations Capital Development Fund (UNCDF) Uganda Business Survey, which revealed significant challenges faced by micro-firms and female-led businesses in accessing capital.

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Edward Claessen, Head of the Regional Hub for East Africa at EIB, emphasized the critical role of access to finance in driving investment in Africa. He reiterated the challenges encountered by micro-firms and female-led businesses and highlighted the potential of the funding provided to Centenary Rural Development Bank in addressing these hurdles and fostering Uganda’s economic growth.

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Fabian Kasi, Managing Director at Centenary Bank, expressed how the partnership investment aligns with the bank’s strategic objectives, particularly in expanding its outreach to underserved populations. Kasi emphasized the bank’s commitment to extending financial inclusion to the bottom of the pyramid, focusing on microfinance and agriculture lending.

Ambassador Jan Sadek, Head of the European Union Delegation to Uganda, commended the investment partnership’s emphasis on women-led and owned businesses. He emphasized the significance of such collaborations in leveraging investments to drive sustainable and inclusive growth, aligning with the EU’s Global Gateway investment strategy.

CERUDEB, with its primary objective to provide innovative financial solutions, particularly in microfinance, has been a longstanding partner of the EIB since 2008. The bank has received investments totaling over €61 million to date and has benefitted from EIB’s technical assistance to enhance its operations and outreach.

Established in 1983 under the initiative of the Ugandan Catholic Church, CERUDEB has evolved into a prominent financial institution, with 80 branches across Uganda and a wide network of agents facilitating financial services, especially in remote areas.

The EIB, through its various financial instruments, aims to support private sector businesses in Uganda, focusing on sectors such as agriculture and promoting gender equality. Alongside financial support, technical assistance is provided to enhance the capacity and sustainability of partner institutions and their clients.

Edward Claessen emphasized EIB Global’s commitment to supporting financial intermediaries, including banks, microfinance institutions, and non-banking financial entities, to expand their outreach and enhance financial inclusiveness across Africa.

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