Uganda Development Bank (UDB), the country’s national Development Finance Institution, has signed a Loan Portfolio Guarantee agreement with the African Guarantee Fund (AGF).

The agreement will scale up lending to SMEs, Women, Youth-affiliated businesses, and green projects in Uganda with credit worth Shs16 billion.

The announcement was made during an agreement signing ceremony that was held at the Sheraton Kampala Hotel on Wednesday.

Patricia Ojangole, the UDB Managing Director, 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,”

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.