Stanbic cuts lending rates to 10% for agriculture SACCOs

KAMPALA — The Association of Microfinance Institutions of Uganda convened recently for its 28th Annual General Meeting as part of its continued commitment to share information and foster partnerships within the microfinance sector.

Dedicated to promoting professionalism and best practices across the sector, membership currently stands at 204 institutions. These include savings and credit cooperative organizations, non-deposit-taking microfinance institutions, microfinance deposit-taking institutions, commercial banks in the microfinance space, and associate members such as development partners, wholesale lenders, consultants, and academic institutions.

AMFIU was founded in November 1996 through the collaboration of several organizations with interest in microfinance. The main reasons for its establishment were the needs for microfinance institutions to have a common voice, to lobby government for favorable policies, to share information and experiences, and to network with both local and international actors.

Speaking about financial inclusion of women and smallholder farmers, Stephen Segujja, head of the Economic Enterprise Restart Fund at Stanbic Bank, said financial inclusion is about creating opportunities for families to build resilience and prosperity.

“We believe that financial inclusion is not simply about opening accounts or providing loans, it’s about creating opportunities,” Segujja said. “It is about enabling a farmer to increase productivity, a woman entrepreneur to expand her business, a young person to pursue their ambitions and families to build resilience and prosperity. This is why our partnership with AMFIU remains so important.”

Stanbic’s commitment to women and farmers is driven by its Women, Youth, and Farmers agenda, anchored by a 1 trillion Ugandan shilling investment pledge. The bank provides targeted financial solutions, capacity building, and strategic partnerships to increase yields, boost incomes and formalize businesses across Uganda.

Segujja said that at the start of 2021, the bank barely had any business with SACCOs and village savings and loan associations. However, partnership from the members has created a significant shift in how the bank views these organizations.

“Since 2021 more than 362 billion shillings has been extended through those SACCOs and VSLAs reaching nearly 4 million Ugandans, the majority of whom have been smallholder farmers,” Segujja said. He added that 780,000 members have been able to access credit through these community-based institutions.

James Onyutta, the AMFIU board president, said the microfinance sector continues to play a pivotal role in advancing financial inclusion, supporting enterprise growth and improving livelihoods across Uganda.

Over the years, AMFIU’s collaboration has focused on strengthening SACCOs and VSLAs to expand financial services to underserved communities. Through these institutions, affordable finance is reaching people who would otherwise remain excluded from the financial sector.

“Despite the evolving economic environment, our member institutions continue to demonstrate remarkable resilience and commitment to serving millions of Ugandans, particularly low income households, microenterprises, vulnerable groups that could have been excluded from the formal financial sector and rural communities,” Onyutta said.

Moses Ogwapus, commissioner for the financial services department at the Ministry of Finance, Planning and Economic Development, served as the chief guest and thanked AMFIU for its continued leadership.

“Your work has enabled millions of Ugandans particularly women, farmers and entrepreneurs to access opportunities that were once beyond their reach,” Ogwapus said.

Stanbic’s objective is to strengthen the capacity of microfinance institutions to extend affordable credit deeper into communities where access to formal financial services remains limited.

“We understand that SACCOs need affordable capital to serve the members effectively and that’s why we’ve dropped our lending rates to specifically agriculture-based SACCOs to 10% per annum,” Segujja said. “We believe that is the lowest in the market and not only do we lend to only SACCOs and VSLAs, we are also now lending to microfinance institutions.”

Segujja stated that the bank is also lending to general economic activity SACCOs at 12.5%. These funds can go up to 7 billion shillings per SACCO.

“Digitization is becoming increasingly important and Stanbic Bank is working with SACCOs to adopt digital solutions that improve efficiency, transparency and customer experience,” Segujja said. “We’ve been working with partners like aBi Finance, one of our first financial partners, to provide grants to SACCOs to digitize them. Additionally, we are also using our FlexiPay platform to digitalize their members to ensure that we reach as many people as possible.”

Stanbic Bank’s partnership has also focused on building institutional capacity for more than 35,000 women leaders and farmer representatives who have been trained in governance, financial management and leadership.