Govt signs Shs80b loan to boost rural finance services
Farmers weed their maize garden. Government has signed a new loan project expected to improve food security in rural areas. FILE PHOTO
What you need to know:
Seven-year project expected to improve food security among others
KAMPALA
Government and the International Fund for Agricultural Development (IFAD) have signed a $29 million (about Shs79.750 billion) loan agreement to finance the Project for Financial Inclusion in rural areas of the country.
Officials say the seven-year project, signed on Monday in Rome, Italy by Ms Grace Dinah Akello, the Ambassador and Permanent Representative of Uganda to Italy, and IFAD vice President Michel Mordasini, aims to sustainably increase access to and use of financial services by rural populations in Uganda.
With a total cost of $36.6 million (about Shs100.650 billion), the project is co-financed with $4.9 million (about Shs13.475 billion) from the Government of Uganda and $1.4 million from the beneficiaries themselves.
“The supply of financial services to rural areas in Uganda is still very limited, falling significantly short of demand. In these areas, community-based savings and credit groups are the only financial intermediaries responding to financial services demands of the rural people,” said Mr Mordasini during the signing ceremony.
Mr Mordasini added: “The financing agreement we are signing today is tangible evidence of our ongoing joint collaboration with the Government of Uganda to alleviate poverty.”
Project for Financial Inclusion in Rural Areas (PROFIRA) is designed to help 576,000 financially excluded rural households, particularly women and young people, to improve their economic activities and livelihoods.
It will also expand and improve the communities’ access to financial services aiming to increase loans and savings resources available to and used by members.
By the end of the seven-year period, it is expected that the project will have helped increase the income of the project participants, improved food and nutrition security and reduced vulnerability of the rural communities in the country.
TOTAL INVESTMENTS
Since 1982, IFAD is said to have invested a total of $325.5 million in 15 programmes and projects in Uganda, amounting to $1.3 billion when co-financing is included. It is estimated nearly five million Ugandan rural households have benefitted from these investments.
