Centenary and European Investment Bank Inject €100 Million in Ugandan Micro-Businesses

On March 6th, Centenary Rural Development Bank Ltd (CERUDEB) and the European Investment Bank (EIB Global) unveiled a groundbreaking partnership, injecting €100 million into private-sector enterprises with a primary focus on female borrowers and microenterprises in rural areas.

This substantial investment marks EIB Global’s most extensive microfinance loan to any country within the African, Caribbean, and Pacific (ACP) regions. The primary beneficiaries of this initiative are microentrepreneurs or microenterprises with fewer than 10 full-time employees.

With the aim of aiding financially underserved entrepreneurs in rural areas recovering from the COVID-19 pandemic, 60% of the funding will be allocated to projects outside the capital city of Kampala.

In alignment with the EIB’s 2x Challenge criteria and SheInvest initiative, CERUDEB will allocate at least 50% of the financing to support women-run or women-owned businesses.

The announcement was made ahead of the formal signing of the agreement at the EU-Uganda Business Forum, attended by Uganda’s President Museveni.

According to a 2020 United Nations Capital Development Fund (UNCDF) survey, microfirms and female-led firms encounter significant constraints, with 80% reporting difficulties in accessing capital. The initiative aims to address these challenges and support economic growth in Uganda.

Edward Claessen, Head of the Regional Hub for East Africa at EIB, emphasized the importance of this funding opportunity in overcoming the obstacles faced by microfirms and female-led businesses in accessing capital.

Centenary Bank’s Managing Director, Fabian Kasi, stated that the partnership aligns with the bank’s strategy to extend financial inclusion to the bottom of the pyramid. The bank aims to issue 1.9 million loans to small businesses and microenterprises, with a focus on empowering women-run businesses and supporting microenterprises in rural areas.

Jan Sadek, Head of the European Union Delegation to Uganda, highlighted the investment’s significance in promoting sustainable and inclusive growth. He emphasized how the partnership aligns with the European Union’s investment strategy, leveraging investments to narrow gaps and enhance competitiveness.

CERUDEB, a long-term partner of EIB since 2008, has benefited from over €61 million in investments to date. The bank’s strategic objective is to provide innovative financial solutions, particularly in microfinance, and catalyze sustainable socioeconomic change.

The investment partnership signifies Uganda’s commitment to fostering a transparent financial environment, reinforcing its reputation as a responsible member of the global financial community. This successful exit from the FATF Grey List enhances Uganda’s attractiveness to investors and facilitates greater access to international financial markets.