Rural Financial Programme - Support to Agrobusiness Initiative Trust Fund

Despite significant improvements in recent years the Uganda financial sector’s services are still limited to urban and peri-urban areas, while rural areas and the agricultural sector remain largely neglected by the formal financial system. As around 85% of the population lives in rural areas in Uganda improved access to adequate financial services will significantly contribute to the social and economic development of the country. Therefore, the Governments of Germany and Uganda decided to set up the Rural Finance Enhancement Programme (RFEP). The purpose of the Programme is to improve access to sustainable and demand-driven financial services for the rural population and rural Micro, Small and Medium Enterprises (MSME) in Uganda. The Rural Challenge Fund will provide partial grants for the development of new financial products and business approaches for rural financing with the aim to overcome fragmentation in the financial sector. The Fund shall qualify and prepare selected formal and informal financial institution for a possible future rural credit line. Agrobusiness Initiative Trust will implement the Rural Challenge Fund via a separate account held with a commercial financial institution. As Programme-Executing Agency (PEA) aBi Trust shall be responsible for the oversight of implementation and monitoring of the Rural Challenge Fund. aBi Trust will be in charge for administering the German financial contribution and is accountable to the Ministry of Finance and to KfW for the implementation of the Challenge Fund.