Michael Mugabi, Managing Director/CEO of Housing Finance Bank highlighted what he described as the bank’s strategic focus on enabling micro, small, and medium enterprises (MSMEs), especially those owned by women.
Uganda’s Housing Finance Bank (HFB) has joined forces with EIB Global, the investment arm of the European Investment Bank (EIB), to inject €25 million into the country’s private sector, with a laser focus on female-led and owned businesses.
The initiative aims to allocate at least half of the investment funds to businesses owned or operated by women, or those catering primarily to female clientele.
Speaking at the signing ceremony in Kampala on Wednesday, Edward Claessen, Head of the EIB Regional Hub for East Africa, emphasized the importance of “supporting entrepreneurship and business development, particularly for women” hence addressing systemic gender inequalities in accessing capital.
Michael Mugabi, Managing Director/CEO of Housing Finance Bank highlighted what he described as the bank’s strategic focus on enabling micro, small, and medium enterprises (MSMEs), especially those owned by women.
“Additionally, 50% of the funds in the investment facility will be dedicated to enhancing women’s access to finance to grow their ventures,” said Mugabi.
“This is based on our observations where we see women doing a lot but are still limited due to barriers such as capital access,” he said, adding, “With this financial support, we believe they can do more in addition to providing upskilling and capacity building to ensure success.”
Officials said the development marks a significant milestone in the pursuit of gender equality within Uganda’s entrepreneurial landscape.
The 2020 Mastercard Global Index of Women Entrepreneurs estimated that women own nearly 40% of all businesses.
However, women entrepreneurs earn 30 % lower profits than men and women business owners in Uganda face gender specific barriers, including lower access to capital.
By prioritizing women’s access to finance, officials from EU and Housing Finance Bank said the collaboration will generate a profound developmental impact across various sectors, including agriculture, health, manufacturing, transport, trade, education, renewable energy, and clean water.
At its core, the officials said, this endeavor aligns with the Ugandan and European Union’s priorities, as it seeks to foster inclusive growth and sustainable economic development by empowering women.
The European Investment Bank says it adheres to the 2X Challenge Criteria, which mandates a significant portion of investments to be directed towards businesses with strong female representation.
By raising the threshold from 30% to 50%, both EIB and HFB seek to enhance the socio-economic conditions of women in Uganda.
Beyond the partnership with HFB, Ugandan entrepreneurs stand to benefit from the EIB’s SheInvest initiative, launched in 2019.
This initiative aims to mobilize €2 billion of gender-responsive investment across Africa, with a specific focus on empowering female-led businesses.
Over the years, the EIB, in collaboration with various financial institutions in Uganda, has provided support to private sector businesses, with a particular emphasis on agriculture and gender thematic sectors.
Accompanying technical assistance has been instrumental in enhancing the capacity of these institutions and their clients, covering a wide array of topics including risk management, product development, and financial literacy.