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UDB Partners With Fintechs To Help Farmers Access Loans

by Wangah Wanyama
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By Prossy Nandudu

Small holder farmers in Northern Uganda are to access credit through digital means, following the launch of AgriConnect, a Fintech solution.

The innovation, will offer both a savings and lending options for small-holder farmers. It also has a platform for Village Saving and Loans Associations (VSLAs) to help savers access short-term seasonal loans and saving products digitally at affordable rates.

The platform that will be implemented by Ensibuuko, a Ugandan Fintech company that provides digital infrastructure embedded with financial services for community banking schemes including SACCOs and VSLAs.

According to a press statement released shortly after the event in Yumbe on Monday afternoon, development of the platform was supported by the Uganda Development Bank (UDB), European Union, United Nations Capital Development Fund (UNCDF) and the Food and Agriculture Organization (FAO)

Speaking at the launch on Monday in Yumbe district, Patricia Ojangole the Managing Director of Uganda Development Bank said the innovation will disseminate credit to the masses, lower underserved markets which will drive financial and digital inclusion of especially the farming community.

 “The world is fast evolving due to advancements in technology, and it is key that as a development finance partner, we recognize such changes and make deliberate efforts to back up inventions that influence the growth of key sectors of the economy like Agriculture,” said Ojangole.

Ojangole appealed to smallholder farmers in Yumbe and neighboring areas to embrace the service which will boost their output and participation in agribusiness.

“I would like to specifically thank our partners Ensibuuko, EU, FAO, and UNCDF for joining us on this journey that aims to transform communities through financial empowerment, which will in the long run boost the performance of Uganda’s agricultural sector,” Ojangole added.

Gerald Otim, CEO at Ensibuuko, explained that farmers will have access to digital loans to increase production, intensify food security, and boost household incomes of the farming communities across Uganda.

He added that lessons from the pilot will enable the implementers to scale the solution to impact more farmers with a target of 18,000 at full cycle. Otim added that launch also marks a partnership the Uganda Development Bank and a Ugandan fintechs.

Officiating at the launch, the minister of state for finance Investment and Privatization Evelyn Anite said over the last few decades, digitalization has transformed causing varied social and economic changes.

“In Uganda, Anite said digitalization continues to take root in shaping various sectors, and specifically the financial services. AgriConnect will reinvigorate and reshape our country Uganda. This indeed is a timely product for Uganda,” said Anite.

Richard Ndahiro, the United Nations Capital Development Fund (UNCDF) Technical Advisor reaffirmed its commitment towards boosting financial inclusion in Uganda.  

He explained that they have been involved in advancing access to finance through digital financial services in Uganda for the last seven years, adding that solutions like digital payments and savings accounts have improved in various agri-value chains.

The Global Data Findex 2021, reports that digital financial services have enabled more Ugandans to access formal financial services with 66% of Ugandan adults said to be having access to a bank account. However, while 77% of Ugandans borrow money only 31% borrow from a formal financial institution. Besides smallholder farmers are top on the list of those excluded from access to formal borrowing.

“The solution launched today leverages digital innovation to enable access to finance for farmers. This project is one of the ways UNCDF is working with partners and financial services providers to drive digital financial inclusion beyond payments,” Ndahiro added.

At the same event, the FAO country representative Dr Antonio Querido said that AgriConnect will enhance the agriculture sector and improve farmer livelihoods in Uganda.

“Public funding alone is not enough to tackle the world’s most pressing sustainable development challenges in agriculture. Private investments that generate social or environmental benefits alongside returns can help fill that investment gaps. The pilot solution will boost sustainable private investments in the agrifood sector and improve farmers’ access to digital credit,” said Querido.

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