CFAs: Digitization and Credit Services for Micro and Small Agribusinesses in Uganda

UNCDF, in partnership with the World Food Programme (WFP)-Agriculture Market Support (AMS) programme, is implementing a project funded by the Mastercard Foundation. The project’s ultimate objective is to create job opportunities for 90,500 youth in rural Uganda, contributing to the Mastercard Foundation Young Africa Works strategy.

Problem Statement 

• Access to finance for youth, women, and refugee-led agribusinesses in Uganda faces significant challenges, deeply affecting their growth and sustainability. These groups often encounter systemic barriers, including limited collateral, lack of financial literacy, and stringent lending criteria set by traditional financial institutions. Youth and women, in particular, struggle with socio-cultural constraints that limit their economic participation and asset ownership, making it difficult to meet the requirements for formal credit. Refugee-led agribusinesses face additional hurdles such as legal and regulatory challenges, lack of identification, and restricted mobility, which further impede their access to financial services. Moreover, the high-risk perception of agribusinesses, exacerbated by climate change and market volatility, deters financial institutions from extending credit to these vulnerable groups. Consequently, there is a pressing need for innovative financing solutions, policy reforms, and targeted support programs to enhance financial inclusion and empower these marginalized agribusinesses in Uganda.

Key Objectives

• The UNCDF projects aims to catalyze the digitization process of agribusiness MSEs, VSLAs and farmer cooperatives led especially by the youth, women and refugees. The successful applicant to this selection process shall assist UNCDF in achieving the following objectives:
  • Youth, women, refugees, SHF enterprises, and MSEs will have increased access to digital services that improve access to credit, marketing, market information, ag-extension, and aginputs.
  • Digital services providers (AgriTechs, FinTechs, etc.) have improved business models and services that enhance employment or business opportunities for youth, women, refugees or SHF enterprises and MSEs.
  • Increased access to relevant financial services (especially credit) for youth, women, refugees, and their MSEs.

Funding Information

• UNCDF contributions may range from 360,000,000UGX (USD 100,000) to 540,000,000UGX (USD 150,000) for each applicant. Each applicant must contribute at least 15% of the project’s total costs.
• The implementation of the Agreement that will be signed between UNCDF and the applicant is expected to have a 24 months (about 2 years) duration. Activities are expected to commence on 1st September 2024 and be completed no later than September 2026. Final and assessment report will have to be submitted no later than December 2026.

Expected Outcomes

• Successful applicants will contribute to the following development results:
  • Enable target beneficiaries (mainly youth, women, and refugees) to access digitization tools and solutions for business improvement.
  • Facilitate affordable finance (credit) access for target beneficiaries to support capital needs, asset acquisition, and business expansion.

Who should Apply?

• They are seeking applications from:
  • Digital solution providers with platforms that enable agribusiness MSEs to access markets, marketing information, and quality inputs
  • Financial service providers capable of developing and availing suitable loan products using alternative credit scoring algorithms based on digital data
• The ideal applicant(s) should be able to provide a scalable solution deployable in the Northern, West Nile, Karamoja, and Southwestern regions of Uganda.
• Note: UNCDF is committed to achieving workforce diversity in terms of gender, nationality and culture. Individuals from minority groups, indigenous groups and persons with disabilities are equally encouraged to apply.

For more information, visit UNCDF.