aBi Finance Ltd, a leading player in promoting access to sustainable agribusiness finance in Uganda has said it is targeting at least 83,000 smallholder farmers to get green inclusive finances in the next five years.
“We have put in place shs750 billion and we are hoping to reach 830,000 smallholder farmers and agribusinesses, 40% of whom must be women and youths at 30% ,” aBi Finance CEO , Mona Muguma Ssebuliba said.
She was speaking during a stakeholder engagement held at Kampala Serena Hotel.
During the engagement, she spoke to stakeholders of aBi Finance’s new business plan for 2024- 2028, setting ambitious targets aimed at promoting climate resilience and economic empowerment for Uganda’s smallholder farmers and agribusinesses.
She explained that since the launch of this new business plan in May, aBi Finance has already disbursed over shs 30 billion in green finance to 20 partner financial institutions.
These institutions have in turn lent it out to smallholder farmers and agribusiness deploying over 90% of it in climate change adaptation investments.
“ aBi Finance aims to increase its portfolio of green finance from the current 15% to at least 75% by 2028,” Mrs Ssebuliba said.
She noted that working alongside actors in the financial services sector, aBi Finance will continue to utilize a mix of financial instruments to strengthen financial institutions’ ability to provide credit to smallholder farmers and agribusinesses.
These interventions are guided by Environmental Social and Governance (ESG) principles, ensuring an inclusive focus on planet, people and profits to promote long-term sustainability.
Officials said between 2022 and 2024, aBi Finance has implemented several green finance interventions.
In partnership with the Global Green Growth Institute (GGGI), aBi developed the green agribusiness taxonomy to enable financial institutions classify green investments with they are financing.
This was followed by the development and distribution of green Information, Education and Communication (IEC) materials to 1,000 branches of 52 partner financial institutions.
aBi Finance developed or updated environmental policies and green loan products for 40 partner financial institutions.
Other interventions implemented include the enhancement of Management Information Systems (MIS) of 27 financial institutions to report green loans, development of the ESG framework for Tiers 1,2 and 3 financial institutions in partnership with the Bank of Uganda (BoU) and Uganda Bankers Association (UBA).
aBi Finance is currently working on developing the ESG framework for Tier 4 financial institutions in partnership with Uganda Microfinance Regulatory Authority (UMRA), Uganda Cooperative Savings and Credit Union Limited (UCSCU), the Association of Microfinance Institutions of Uganda (AMFIU) and Financial Technologies Service Providers Association (FITSPA).
aBi Finance is also partnering with Uganda Institute of Banking and Financial Services (UIBFS) to develop a curriculum to enable broad-based learning about Green finance, ESG, Sustainability in the Uganda context.
As a vital sector in Uganda’s economy, agriculture supports millions of households, especially in rural areas, making sustainable investment essential to climate resilience and economic growth.
According to the Ministry of Agriculture, Animal Industry and Fisheries (MAAF), agriculture sector performance from FY 2018/19 – 2022/23 reported that the gross value added for agriculture, forestry and fishing sector was shs 43 billion compared to shs 39 billion registered in FY 2021/22, reflecting a 12.5% increase.
The agricultural sector had a contribution of 23.8% to Gross Domestic Product in FY 2022/23 compared to 24.1% in FY 2021/22.
“In green financing, we are looking to focus particularly on climate change adaptation that will support beneficiaries to be resilient to the shocks that are being brought about by climate change. We will not forget and we will continue to target underserved regions in Northern, Eastern Ugandan, underserved demographics, women, youth, and refugees. They remain a core for us as they have been over the last 14 years.” Mrs. Ssebuliba added.
