Patricia Ojangole, the executive director of the Uganda Development Bank, has been chosen to lead a six-person team that will run a four-million euros (Shs 17.7bn) facility that is intended to provide businesses, adding value to the agriculture products.
More funding of up to eight million euros is expected to come from private funders at a later stage, according to officials managing the fund.
The fund, named the Support to Agricultural Revitalization and Transformation (Start), is part of the Development Initiative for Northern Uganda (DINU) supported by the European Union. The fund covers five sub-regions: Karamoja, Acholi, Lango, Teso, and West Nile.
OJangole will serve for one year with Dr Dmitry Pozhidaev from The United Nations Capital Development Fund, PSFU’s Gideon Badagawa, Cires Alonso Adolfo, the European Union observer, Dennis Kiyimba and Dr Gudula Naiga Basaza.
Ojangole told reporters last week that Start is intended to address the “middle missing” gap in agricultural finance. She said they target projects with finance needs of 10,000 euros (Shs 40m) to 100,000 euros (Shs 400m).
“Start is expected to offer affordable finance and we expect it to contribute to increased food security, improved maternal and child nutrition,” she said.
The money is a loan and no enterprise will be given a grant, officials said. They will take the money at between 10% and 12% interest and have a grace period of up to five years. These are fairly better terms compared to market rates that range between 18% and 22% per annum.
The facility does not support primary agriculture – where most Ugandans are – but says it will provide money for capital-intensive projects owned by small and medium enterprises. Most funders steer clear of primary agriculture because of the huge uncertainty that farmers face in regards to the weather.
Start called for proposals last May and at least 342 enterprises applied. After sieving, which is done by Private Sector Foundation of Uganda (PSFU) as one of the implementing agencies, 31 enterprises have so far been shortlisted to go to another round.
Gideon Badagawa, PSFU director, said: “There will be another round of sieving where the final businesses to receive money will be announced.”The shortlisted projects cover apiary, cassava, groundnuts, livestock, maize, millet and sesame, among others.