A two-billion-shilling financial package has been unveiled for smallholder farmers and agribusinesses in northern and northeastern Uganda. The fund will help enhance access to finance, productivity, and value addition. The Sustainable Pathways for Rural Outreach and Upward Transition into Nature-positive Growth initiative (SPROUT) Project is under aBi Finance Ltd and ASA Microfinance. It targets women farmers and agribusiness enterprises
It comes at a time when Uganda is accelerating implementation of its Nation al Financial Inclusion Strategy II (2023-2028), which prioritises reducing access barriers, deepening the usage of quality and affordable financial products, strengthening financial literacy and consumer protection, and developing an inclusive green finance market.
Yet, according to Mona Muguma, Chief Executive Officer at aBi Finance Ltd, for many rural households and agribusinesses, access to finance remains one of the greatest barriers to growth, with women facing additional constraints. She says that Uganda being an agricultural economy, the sector should be accounting for a bigger part of private sector credit than the 12 percent, yet it is suffering accessing finance for various reasons fronted by lenders.
Farmers, especially in Uganda, often struggle to obtain financing for climate-smart technologies such as solar-powered irrigation, improved seed varieties, efficient processing equipment and sustainable farming practices.
Muguma says, many communities in Northern and Eastern Uganda remain underserved by formal financial institutions, limiting opportunities for families and small businesses to invest in productive activities and build resilience against economic and climate shocks.
In 2025, the number of beneficiaries it reached in Northern and Eastern Uganda fell by 10 percent, from 87,737 to 79,201, after weather-related shocks affected agribusiness performance and prompted some partner institutions to scale back lending in parts of the region.
Stressing the extent of climate change impacts on Uganda, Muguma says Uganda is not improving in terms of climate change preparedness and vulnerability, hence the need for more efforts to promote climate-smart agriculture.
SPROUT forms part of aBi Finance’s response – a deliberate shift towards partners whose branch networks and operating models can restore lending momentum in those markets. “Financial inclusion is about far more than opening accounts, it is about enabling people to invest, adapt to climate change, build sustainable businesses and improve their livelihoods,” Muguma.
She added that for women in particular, better access to appropriate finance can create the opportunity to invest in and grow businesses that contribute to productivity, employment and broader economic development.
This would go a long way in sustaining the markets, including feeding processing factories that are currently producing below capacity because of undersupply of raw materials. The project responds to five interconnected barriers that continue to slow rural economic transformation, including the shortage of finance for climate-smart investment.
SPROUT addresses the shortage of finance for climate-smart investment. ASA Microfinance will refine three of its agribusiness lending products so that terms, tenors and collateral requirements better match the realities of green and inclusive borrowers – women farmers investing in irrigation, energy-efficient processing or improved inputs, whose returns do not follow a conventional monthly repayment curve.
The project also expects to improve physical access to financial services by supporting the establishment of new ASA branches across Northern and Eastern Uganda., according to Irene Maberi. SPROUT also addresses financial literacy, one of the biggest barriers to rural households to use financial services effectively.
Approximately 5,000 women-owned agribusinesses will receive training in financial management, responsible borrowing and green financing. At least 30 percent of those trained are expected to take up green loans, linking the training directly to measurable uptake rather than treating it as an end in itself.
One of the main challenges smallholder farmers and most especially women face accessing finance is collateral. Maberi says they will not ask for physical assets but will use the funds and savings as security.
On inclusion, the partnership will introduce a USSD-based digital platform, making it easier for customers to transact using basic mobile phones without requiring smartphones or internet connectivity, supporting a targeted 90,000 transactions-URN. Give us feedback on this story through our email: kamwokyatimes@gmail.com
