Business

IFAD Conference to Discuss Inclusive Finance as a Driver of Rural Transformation

Majority of Ugandans engage in agriculture are subsistence farmers and lack access to affordable credit

Policy makers and development partners are set to meet in Kampala next week to find ways of expanding access to fimancial services for people living in rural areas.

The four day workshop to be held at Speke Resort in Munyonyo between May 22 and 25 is organized by International Fund for Agricultural Development (IFAD) along with the government of Uganda.

The workshop will mainly review the implementation of IFAD-funded projects in East and Southern Africa and look at ways to foster the transformation of rural economies and communities and improve rural development interventions that provide rural people a way out of hunger and poverty.

An estimated 300 participants, sickness including representatives of IFAD-funded projects, government, development agencies, United Nations agencies, the private sector, and members of civil society and farmers’ organizations, are expected to attend.

Uganda’s Minister for Agriculture Vincent Bamulangaki Ssempijja and Sana F.K. Jatta the IFAD Regional Director for the East and Southern Africa Division will open the workshop on May 22.

“Every country has to make specific policy choices and carefully target investments that empower the rural poor, especially young people and women, in a manner that enables those individuals to seize opportunities and deal with threats,” Jatta said ahead of the discussions.

He added; “This workshop will be where IFAD’s experience over four decades of operation can be harnessed by the governments, project teams, private sector players, and the farmers themselves to achieve the ambitious goals of eradicating poverty, ending hunger and malnutrition, and promoting sustainable agriculture in East and Southern Africa.”

Prior to the official opening of the Regional Implementation Workshop, the first East and Southern Africa Farmers Forum will take place on 22 May in Kampala.

Currently, IFAD has 44 ongoing programmes and projects in 16 countries in East and Southern Africa totaling USD 1.6 billion of IFAD investments in the region’s ongoing portfolio.

In Uganda alone, it has financed 16 rural development programmes and projects for a total cost of USD 1.4 billion with USD 385.7 million of its own resource benefitting directly nearly five million households.

In its 2017 annual economic outlook for Uganda in February, World Bank reported poor access to financial services as a major barrier to economic growth especially in rural areas. The majority of adults in Uganda (65%) doesn’t have access to formal credit while only 35% of them have active loans in a financial institution.

While it is true that most of Ugandans are employed in farming and small enterprises, the high cost of credit has made it difficult for them to acquire loans to grow their businesses. Lending rates for commercial banks has averaged at 20% for the last 5 years.

Uganda ranked 120th out of 138 countries globally in affordability of financial services according to the 2017 Economic Forum Competitiveness Report.

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