In a landmark move set to invigorate Uganda’s trade and construction sectors, the African Guarantee Fund (AGF) has renewed its portfolio guarantee limit of $25 million with Centenary Bank, the nation’s leading microfinance institution. This renewed partnership underscores AGF’s dedication to bolstering small and medium enterprises (SMEs) in Uganda, enhancing their access to crucial financing.
Today’s official signing ceremony celebrated the continued collaboration between AGF and Centenary Bank, a partnership that has already delivered substantial benefits, especially to the trade and construction sectors key drivers of Uganda’s economic growth.
Fabian Kasi, Managing Director of Centenary Bank, highlighted the impact of the renewed guarantee. “Through our partnership with the African Guarantee Fund, we’ve been able to support over 1,600 SMEs in the trade and construction sectors. These businesses have not only survived but thrived, creating thousands of jobs and significantly contributing to our nation’s socio-economic development. The ripple effects of this support extend beyond individual businesses, positively impacting the broader economy and improving countless lives,” he remarked.
Since the inception of their collaboration, AGF’s guarantees have empowered Centenary Bank to provide financing to a significant number of SMEs. With the renewed guarantee, nearly $200 million in financing is expected to be unlocked, benefiting over 700 SMEs and enabling them to expand their operations.
Jules Ngankam, AGF Group CEO, emphasized the broader implications of this partnership. “Our collaboration with Centenary Bank is a crucial step in our mission to support SMEs, representing about 90% of private sector businesses in Uganda. By improving access to finance for these SMEs, particularly those led by women and engaged in green initiatives, we are fostering entrepreneurship and contributing to sustainable economic development,” he stated.
In addition to extending the credit guarantee facility, AGF will provide a capacity development grant to Centenary Bank. This grant aims to enhance the bank’s efficiency by automating credit processes and improving credit analysis. It will also support the bank in effectively targeting green financing and women-led enterprises.
This initiative is further supported by the African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) program, which seeks to close the $49 billion financing gap women entrepreneurs face by offering more concessional loans and favorable collateral terms.
Centenary Bank’s commitment to supporting women entrepreneurs was recently recognized when it received the AFAWA Bank of the Year Award at the 2024 African Banker Awards. The award honors the bank’s significant achievements in supporting women SMEs, particularly through programs like Cente SupaWoman, which provides financial education and business skills training to women entrepreneurs.
The injection of capital into SMEs is expected to have a profound multiplier effect on the Ugandan economy. Enhanced access to finance will enable SMEs to increase their production capacities, create more jobs, and contribute to higher tax revenues. This growth is anticipated to strengthen Uganda’s GDP and enhance overall economic stability and prosperity. Business owners are encouraged to take advantage of the available credit facilities to drive their growth.