What you need to know:
Government officials say this seven-year development project under the Project for Financial Inclusion in Rural Areas (PROFIRA), is aimed at increasing income, improving food security and vulnerability while targeting people living in rural area
The government and International Fund for Agriculture Development has earmarked $36 million (about Shs106.9 billion) which will see about 2.8 million people getting access to financial services in various villages across the country.
Government officials say this seven-year development project under the Project for Financial Inclusion in Rural Areas (PROFIRA), is aimed at increasing income, improving food security and vulnerability while targeting people living in rural areas.
International Fund for Agriculture Development (IFAD) is contributing $30 million (Shs89b) loan while Uganda government is contributing $6 million (Shs17b) which translates to $36 million (about Shs106.920 billion) and the programme runs from 2015 to 2022.
Speaking during the launch of the project at the Imperial Royal Hotel last Thursday, IFAD country representative, Mr Alessandro Marini, said the project is one of the many efforts by IFAD in partnership with government to improve the livelihoods of the rural people in Uganda.
Empowering the rural population
Mr Alessandro said IFAD’s mandate is to invest in rural people and their institutions to empower them to get out of poverty.
“With Vision 2040, our aim in Uganda is to give the approximately 22.8 per cent of the rural population still living in poverty and the 72 per cent of Uganda’s labour force engaged in agriculture; women, youths, and men, most of whom are smallholder farmers – an opportunity to transform their lives,” he said.
The collaboration between IFAD and the ministry of Finance in support of the sector dates back to 2003 when the IFAD-financed rural financial services programme started.
“The focus will be on increasing financial inclusion for the large portion of the rural population that still has limited or no access to financial services, with the aim to reach 576,000 households, approximately 2.8 million people,” he said.
Mr Alessandro said this will be achieved by supporting community-based financial institutions that have successfully demonstrated that sound financial services can be sustainably provided to the poorest members of rural communities and savings and credit cooperatives throughout the country.
The assistant commissioner Microfinance Department in the ministry of Finance, Planning and Economic Development, Mr Henry Mbaguta, said 35 per cent of the population in the rural areas access finances informally, 32 per cent accesses finance through the non-bank financial institutions, while 17 per cent has to use formal financial services.
Population of rural people the project is targeting.
The amount of money the government of Uganda is contributing.
The amount in form of a loan that International Fund for Agriculture Development (IFAD) is contributing to the project.