Uganda Development Bank (UDB) has partnered with Ensibuuko, European Union, United Nations Capital Development Fund (UNCDF), and FAO to launch a Fintech solution dubbed AgriConnect to ease access to digital financing for smallholder farmers in Uganda.
The innovation, the first digital solution which can offer both a savings and lending option for small-holder farmers in Uganda, will provide a platform for Village Saving and Loans Associations (VSLAs) to digitally access short-term seasonal loans and saving products at affordable rates to grow their businesses.
The entire lending process including application, approval, and disbursement will be done digitally with the funds credited directly to the farmer’s e-mobile wallet.
Photo: IFAD/Susan Beccio
“This solution is aimed at disseminating credit to the mass lower underserved markets consequently driving financial and digital inclusion,” Patricia Ojangole, the UDB Managing Director said.
“The world is fast evolving resultant of advancements in technology, and it is key that as a development finance partner, we recognize such changes and make deliberate effort to back inventions that influence the growth of key sectors of the economy like Agriculture, which employs 68% of the country’s population.”
The pilot project targets to reach at least 1,000 smallholder farmers who will have access to digital loans to enable them to increase production, intensify food security, and boost household incomes of the farming communities across Uganda.
Learnings from the pilot will enable the implementers to scale the solution to impact more farmers with a target of 18,000 at full cycle.
“The event is special in two ways: It is the launch of Uganda’s first ever digital agricultural loan for savings groups, it is also the first-ever launch of a strategic partnership between the Uganda Development Bank and a Ugandan fintech. Such purposeful collaborations are important for financial inclusion, and will go a long way in validating the maturity of Uganda’s fintech landscape,” said Gerald Otim, the CEO at Ensibuuko.
Uganda’s scope of financial services encompassed by Fintech has steadily been increasing and this has been necessitated by network readiness, digital literacy, and mobile phone penetration.
According to World Bank, Uganda ranks 172nd on Gross National Income (GNI) and 116th on the Network Readiness Index (NRI), respectively.
The country’s mobile penetration is at 49% and smartphone adoption is at 16%; all of which account for the contribution of the digital economy which contributes 7% to the economy…Read more on All Africa
This article was originally published by MFW4A