Stanbic Bank has entered into a partnership with CURAD, an agribusiness incubator that trains Micro and Small to Medium Enterprises (MSMEs) farmers to explore their full potential for better productivity.
The partnership will see Stanbic Bank support 70 youth under CURAD with UGX150 million over the next 3 years with the aim is further empower the initiative to be able to support more farmers leading to agribusiness development in the country.
Stanbic Bank Uganda’s Head of Agriculture lending Richard Wangwe at the launched noted that MSMEs farmers are often over looked yet they are the highest employers in the informal sector.
“MSMEs farmers have not scaled up to their full potential because they are often over looked. In addition, they tend to have bank deposit accounts but do not borrow from financial institutions. This partnership therefore aims to not only empower farmers to reach their full productivity potential but also come up with financial solutions that best suit their needs,” says Richard.
Wangwe explained the need for business incubation in Uganda; largely due to the fact that many enterprises that fail within 3 years of their set-up.
“Business incubators are designed to nurture the growth of start-up companies and small businesses by helping them survive and grow during their early stages. MSMEs play a vital role in job creation, creating a skilled workforce, facilitating private ownership, rapid response to market demands and output generation. As a bank, agriculture is an area of key focus for us as it accounts for 20% of our revenues. We believe farmers need to have financial institutions as partners in a bid to scale them up to their full potential,” he added.
Addressing Journalists at the event, Eva Ssewaggude, the Stanbic Business Incubator Program Manager said with a leading customer loan portfolio of UGX2.2 trillion, the bank has been a key enabler in the agriculture sector, contributing up to UGX350 billion to promote agriculture.
“Stanbic has therefore established an SME incubator that takes SME’s through capacity building. We think it makes business sense to lengthen the life of the SME’s so they can contribute in to the growth of our economy long term,” she said.
CURAD Executive Director Apollo Sewaga added that Uganda’s agriculture sector lacks formal supportive structures that allow SMEs, high potential startups and innovators to start and grow agribusinesses enterprises to their full potential, which leads to the high SME collapse rates.
Agribusiness companies face high startup capital costs that most cannot afford and due to the perceived high risk of agro enterprises, access to financing has been limited.
“Supporting individual entrepreneurs is costly, therefore the support given to CURAD from Stanbic will promote agribusiness development and job creation in the country,” said Apollo.