Young farmers get Stanbic backing for higher productivity

July 16, 2018 in Financial Services, Investment, Land & Agriculture by Editor

July 16, 2018—Stanbic Bank Uganda (SBU) is providing UGX150 million (just over $40,000) during the next three years to support 70 young people to increase productivity in their farming enterprises.

Stanbic Bank Head of Agriculture Lending Richard Wangwe said last week, “Small and Medium Enterprise farmers are often overlooked yet they are the highest employers in the informal sector.

He said, “For this reason, they have not scaled up to their full potential. In addition, they tend to have bank deposit accounts, but do not borrow from financial institutions. This partnership therefore aims to not only empower farmers to reach their full productivity potential, but also come up with financial solutions that best suit their needs.”

SBU has entered into a partnership with CURAD, an agribusiness incubator that trains micro and small to medium enterprises (MSMEs) farmers to explore their full potential for better productivity.

CURAD is a public-private partnership initiative promoted by Makerere University, the National Union of Coffee Agribusinesses and Farm Enterprises Limited (NUCAFE), National Agricultural Research Organization (NARO) and the Uganda Investment Authority (UIA).  During the past four years, just over 130 agro-enterprises have been helped in programme.

During the recent National Budget address, Matia Kasaija, finance minister said one of the major challenges of the government is that agricultural sector growth has been low, growing at an average annual growth rate of less than two percent over the last 25 years, compared to population growth of three percent annually.

CURAD executive director Apollo Sewaga said, “Uganda’s agriculture sector lacks formal supportive structures that allow SMEs, high potential start-ups and innovators to start and grow agribusinesses enterprises to their full potential, which leads to the high SME collapse rates. Secondly, agribusiness companies face high start-up capital costs that most cannot afford and due to the perceived high risk of agro enterprises, access to financing has been limited. Supporting individual entrepreneurs is costly, therefore the support given to CURAD from Stanbic will promote agribusiness development and job creation in the country.”

Speaking at the same event to announce this cooperation, Eva Ssewaggude, the Stanbic Business Incubator Program Manager said, “With a leading customer loan portfolio of UGX 2.2 trillion, Stanbic has been a key enabler in the agriculture sector, contributing UGX350 billion (nearly $95 million) to promote agriculture. And more importantly, with 40,000 SME clients, Stanbic Bank is a key promoter of this critical underserved segment of the economy which generates 80% of our manufacturing output and 90% of new jobs created.”

Wangwe said, “Business incubators are designed to nurture the growth of start-up companies and small businesses by helping them survive and grow during their early stages. SMEs play a vital role in job creation, creating a skilled workforce, facilitating private ownership, rapid response to market demands and output generation. As a bank, agriculture is an area of key focus for us as it accounts for 20 pc of our revenues. We believe farmers need to have financial institutions as partners in a bid to scale them up to their full potential.”

Ssewaggude said, “Stanbic has therefore established an SME incubator that takes SME’s through capacity building.  We think it makes business sense to lengthen the life of the SME’s so they can contribute in to the growth of our economy long term.  We have partnered with other institutions and subject matter experts who lead the trainings and we have so far graduated 34 SMEs.”