YUMBE – A new digital solution dubbed AgriConnect that is expected to ease access to finance by smallholder farmers across Uganda has been launched.
The fintech solution which is supported by the European Union Delegation in Uganda and the Food and Agriculture Organization of the United Nations (FAO) targets to reach at least 1,000 smallholder farmers in the pilot phase.
Launched in the West Nile district of Yumbe on March 27, 2023, the innovation to be adopted by Uganda Development Bank (UDB), the country’s national Development Finance Institution seeks to disseminate credit to populations underserved by banks, most of whom work and rely on their village saving and loan schemes in their respective villages.
Ms. Patricia Ojangole, the Managing Director at UDB said the fintech solution will spur financial inclusion by helping the beneficiary farmers with access to digital loans to enable them to increase production, intensify food security, and boost household incomes of the farming communities across the country.
“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 a 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,” Ms. Ojangole said.
“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,” she added.
Ojangole urged the smallholder farmers in Yumbe District and the neighboring areas to embrace this service which will boost their output and participation in agribusiness and called for more meaningful partnerships.
Dr. Antonio Querido, the FAO Representative in Uganda, whose organization partly funded the fintech innovation said digital loans that more than 1,000 farmers will benefit from, will contribute to poverty reduction in the farming communities of West Nile, Acholi, and Lango sub-regions.
“FAO believes that Public funding alone is not enough to tackle the world’s most pressing sustainable development challenges – from ending poverty and hunger by 2030 to reducing inequalities. Private investments that generate social or environmental benefits alongside returns can help fill that investment gaps. The pilot solution we are launching today is hoped to boost sustainable private investments in the agri-food sector and improve farmers’ access to digital credit,” said Querido.
“This digital technology package is expected to boost UDB’s capacity to do more and better in agriculture, and ultimately, allow the bank to provide credit to more farmers in underserved areas such as the one we are in today,” he said, adding that:
“FAO is grateful to all the partners involved in developing and piloting this solution. The people of Yumbe, you are the first group to benefit from this innovative digital solution spearheaded by UDB.”
Gerald Otim, the CEO at Ensibuuko whose startup helped to develop the product told reporters that the 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.
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.
“Over the last few decades, digitalization has transformed the way of life the world over, causing varied social and economic changes. Likewise, in Uganda, digitalization continues to take root in shaping various sectors, specifically financial services. AgriConnect will reinvigorate and reshape our country Uganda. This indeed is a timely product for Uganda,” said the State Minister of Finance for Investment and Privatization.
“With services like this, Uganda is indeed on a good trajectory to achieve its goals as stipulated in the National Development Plan and Vision 2040.”
Anite lauded UDB, FAO, UNCDF, EU, and Ensibuuko for their critical role in the socio-economic transformation of Uganda and pledged the government’s continued support towards this agenda.
The European Union expressed delight for the partnership mentioning that it will set the tone for further deeper and more sustainable collaboration in the future, benefitting underserved populations.