President Museveni urges financial institutions to make affordable credit to boost access

According to the latest data, only 19% of adults in Uganda have borrowed from a formal financial institution in the last year, 21% have borrowed from a savings group, while 10,594  new SACCOs have been created  through the Parish Development Model offering affordable loans to millions of Ugandans 

 President Yoweri Museveni has commended microfinance institutions and Cooperative societies for promoting the social-economic transformation of Ugandans across the country, saying that their spirit of togetherness, is what has connected microfinance with National Development.

The president made the remarks in a speech read for him by Vice President Jessica Alupo during the Annual Conference on Microfinance and Savings Groups at hotel Africana.

The theme of this year’s Conference is; “Drivers for Sustainable Microfinance and Savings Groups”

He noted that NRM government has rolled out a number of interventions to support microfinance and savings groups which include, Bonna Baggaggawale, Emyooga, Parish Development Model among others, all aimed at enhancing access to finance for all.

The President emphasized that access to finance is the lifeblood of economic development. “Without affordable loans, people cannot start enterprises; businesses cannot invest in their growth and opportunities for productive innovation are lost," he said, adding that  access to finance is at two levels, the first; at the household level. "All Ugandans should have access to affordable credit to invest in profitable family enterprises," he noted. 

The President explained that to ensure increase in access to finance, Government  has set up 10,594 new SACCOs through the Parish Development Model; offering affordable loans to millions of Ugandans to help them escape subsistence agriculture. 

He added that consolidation of various wealth funds into this one pot is an important step toward streamlining access to finance.

The non-agricultural sectors are covered by the Presidential Initiative on Wealth and Job Creation, which has now reached 6,644 Emyooga SACCOs, directly benefiting more than 4 million people and creating 338,000 employment jobs, of which 35% of the jobs created are for women.  The President said that beyond the household level, there is also access to finance for wholesale lenders. 

He said government and other stakeholders must work together to ensure wholesale lenders in microfinance are well organised, properly capitalised and able to lend at affordable rates, which was one of  the goals for which the Microfinance Support Centre was established. 

"Government will continue to capitalise it to fulfil its mandate of lending to SACCOs and Village Savings Loan Associations (VSLAs) at competitive rates.

He advised Microfinance groups to organise themselves to take advantage of and access  to funds from the ADB, linking their activities to UDB’s priority areas.

Unfortunately, the president said, that when it comes to accessing finance, small businesses are often left out. "This is a missed opportunity. Small businesses have huge development potential, in part because they employ so many people," he said. 

He noted that there are estimates to show that more than two thirds of employment in Uganda is concentrated in businesses with fewer than 10 employees.

The President acknowledged the burdensome conditions for accessing credit, especially small business, citing average interest rates as high as 24% and urged the stakeholders in the financial sector to come up with innovative solutions to this challenge. 

 He explained that this will involve scaling up of cooperative businesses; providing technical training, business development services, export support among others. 

In her remarks, the Vice President thanked organizers for ensuring that microfinance stimulates production and productivity among Ugandans. 

 She said it takes all partners to ensure that the four factors of production are accessible to Ugandans. The conference was organized under the theme, "drivers for sustainable microfinance and savings Groups".

The vice president said Microfinance comes in handy to fill the gap adding that she also a beneficiary of microfinance support for her citrus farm in katakwi.

 "Training and guiding of the people is very key, so I encourage you to continue serving your people," Alupo said.

 She said the participants that government will always be their biggest partner and will always work with them.

Responding to earlier requests by minister Haruna Kasolo to leave out UMRA in the rationalization of Government MDA exercise, Alupo said this was a cabinet decision and therefore would be discussed again by cabinet. Kasolo is minister of state for Micro Finance.

Alupo explained that NRM works with people and not only for the people, which is a strong component of the NRM Government. 

She encouraged micro finance institutions to do their best in order to make it easy for President Museveni as he seeks re-election in 2026.