Uganda seeks Japanese expertise to boost PDM SACCOs

KAMPALA. Uganda is seeking Japanese technology, expertise and investment to transform the Parish Development Model (PDM) into a stronger financial and business platform for millions of rural households.

The government says the parish programme, initially rolled out as a vehicle for extending affordable credit to households, is increasingly becoming a channel through which small businesses can access finance, save, invest and join the formal economy.

State Minister for Microfinance Sharsi Musherure made the remarks on Monday during a meeting with a Japanese delegation led by Ms Takahashi Misako, Japan’s Director General and Assistant Minister for African Affairs.

At the centre of the discussions was how Uganda can strengthen community-based finance, particularly the 10,589 PDM SACCOs, through digitalisation, better financial management, savings products, internal controls and skills development.

As of September, the government had reached 3,783,108 PDM beneficiaries and capitalised the Parish Revolving Fund with about Shs4.317 trillion.

“The programme is therefore no longer simply a small loan initiative. It is becoming an important platform for bringing millions of Ugandans into the formal financial and productive economy,” Ms Musherure said.

The scale of the PDM financing makes the SACCOs an increasingly important part of Uganda’s financial ecosystem, particularly for small enterprises and households that remain underserved by conventional banking institutions.

Ms Musherure said Uganda wants to use the partnership with Japan to improve the capacity of SACCOs to mobilise savings, extend affordable credit and provide other financial services.

“We do not only view microfinance simply as the provision of loans but want to build a sustainable financial ecosystem in which ordinary Ugandans can save, access affordable credit, invest, insure themselves and manage risks to grow their businesses,” she said.

She said Uganda could combine its large market and development priorities with Japanese technology, knowledge and investment, particularly in digital financial services and cooperative management.

The proposed cooperation comes as Uganda implements its National Financial Inclusion Strategy II for 2023-2028, which prioritises physical and digital access to financial services, digital finance, consumer protection, financial literacy and inclusive green finance.

The government is also implementing financial inclusion programmes through PDM and Emyooga, alongside private-sector initiatives.

Ms Musherure said Japanese experience in cooperative finance could provide lessons for strengthening Uganda’s SACCOs, whose growth has raised the need for stronger governance, financial controls and professional management.

Beyond financing, the two sides discussed creating a Uganda-Japan Youth Enterprise and Innovation Facility to combine enterprise financing with technical skills, business development support and digital technology.

The proposal builds on existing Japanese support to Uganda’s start-up ecosystem. In 2024, 10 Ugandan start-ups from seven industries joined a JICA-supported acceleration programme.

The discussions also covered green finance for micro and small enterprises, including financing for solar energy, solar-powered irrigation and clean cooking technologies.

Japan’s Assistant Minister said her country wants to expand mutually beneficial cooperation with Uganda in areas including trade and investment, supply chains and logistics, regional connectivity, human-resource development, science, technology and innovation.

The Japanese delegation was accompanied by the country’s Ambassador to Uganda, Ms Sasayama Takuya.

Ms Takahashi said Japan also wants to continue discussions with Uganda on the natural resources sector, including critical minerals, to explore possible areas of cooperation.

She said Japan’s engagement with Africa is anchored on three pillars: promoting peace, creating a cycle of growth between Africa and Japan, and building, through co-creation with the next generation, a society in which everyone can experience prosperity.

The minister also highlighted Japan’s broader contribution to Uganda’s development, particularly in health, education and refugee welfare.

She said the Japan International Cooperation Agency (JICA) had also played a role in supporting major infrastructure milestones in Uganda.

For Uganda, however, the emerging focus on PDM SACCOs shifts the partnership towards a more commercial question: how to ensure the trillions of shillings being channelled to parish-level enterprises translate into sustainable businesses, stronger savings and productive investment rather than simply repeated access to government credit.

Strengthening the institutions managing the funds could therefore determine whether PDM evolves into a durable community-finance system capable of connecting rural enterprises to wider markets and investment.