EU,UNCDF Launch Agribusiness Growth Initiative in Uganda: START II Aims to Foster Sustainable Development”

The European Union Delegation in Uganda, in collaboration with the United Nations Capital Development Fund (UNCDF), has announced an ambitious initiative to promote sustainable agribusiness growth throughout Uganda, according to a press release dated March 12.

The introduction of the Support to Agricultural Revitalization and Transformation (START) Phase II represents a significant investment of EUR 11.5 million (UGX 48.9 billion), co-financed by the European Union. This initiative reflects a strategic approach to stimulate economic development, generate employment opportunities, and foster sustainable growth within the nation.

Building on the achievements of START Phase I, which facilitated concessional loans and reimbursable grants totaling Shs13.5 billion for over 50 SMEs, thus creating markets for more than 120,000 farmers, START II aims to expand its reach across Uganda.

The primary objective of this phase is to tackle the significant challenges faced by agribusiness SMEs in accessing financing for their expansion and development.

START II will focus on promoting value addition and agro-processing by offering affordable medium-term financing to agribusiness SMEs.

This assistance aims to support the expansion of their activities while emphasizing the adoption of environmentally friendly practices and inclusivity, particularly for vulnerable groups and women-led enterprises.

Importantly, the initiative has pledged to allocate 30% of its resources to promote gender equality and support environmentally friendly SMEs.

Sophie De Coninck, Head of the Uganda Office at UNCDF, remarked, “The launch of the START Facility is a crucial milestone in unlocking the potential of agribusiness SMEs in Uganda. By addressing the financing gap and enhancing technical capabilities, we aim to drive sustainable growth, create jobs, and promote economic resilience in the country and beyond.”

Jan Sadek, European Union Ambassador to Uganda, echoed similar sentiments, stating, “Fostering sustainable growth and prosperity in Uganda remains a top priority for the European Union. Through our ongoing collaboration with the United Nations Capital Development Fund, we are dedicated to empowering agribusiness SMEs and creating an environment conducive to economic resilience and job creation.”

To ensure effective implementation and maximize impact, START II will collaborate with various stakeholders, including financial institutions, private sector foundations, government bodies, and international organizations.

Key partners involved in implementing the START facility include the Private Sector Foundation Uganda (PSFU), Federation of Small and Medium Enterprises (FSME), Aceli Africa, and the Uganda Development Bank Limited (UDB).

With approximately 1.1 million micro, small, and medium enterprises (MSMEs) employing around 2.5 million people in Uganda, these businesses play a vital role in the country’s private sector and development. However, challenges such as poor management, lack of records, collateral, and capital hinder their growth potential.