Agricultural and Rural Finance (AGRUFIN) in Uganda

While the financial sector in Uganda at large has experienced considerable growth in recent years, financing for rural areas and agriculture remains limited: only 11% of private sector credit is extended to the agricultural sector and only 15% of the adult population in rural areas use formal financial services (compared to more than 45% in urban areas). Existing financial products rarely respond to the needs of the rural population, many of which are small-holder farmers, while women continue to be particularly disadvantaged. For commercial banks, high transaction costs associated with the delivery of financial services to rural areas as well as the high (perceived) risks associated with agriculture constitute the major barriers. The existing semi-formal rural financial institutions (predominantly Savings and Credit Cooperatives) often lack the capacity to provide sustainable, adequate and innovative finance. On the demand side, people in rural areas often lack the financial literacy to use financial services to their best advantage.

The AGRUFIN Programme will address these challenges in order to strengthen Rural and Agricultural Finance; and focus on the following intervention areas:

1. Regulatory and Supervisory Framework for Rural Finance
2. Coordination Structure for Agricultural Finance 
3. Capacity Building and Product Development for Rural Financial Institutions
4. Strengthening of the Demand Side in Rural Areas

The tender focuses on output area C, with the goal of improving the access to appropriate agricultural and rural finance. Interventions will in particular target the following themes:

1. Capacity Building for Financial Institutions (Strengthen Rural Financial Institutions and their apex bodies in their ability to deliver agricultural and rural finance services)
2. Product Development for Agricultural Finance (Development of innovative financial products for agricultural value chains, together with rural financial institutions, and in close cooperation with apex organizations)

These interventions will be implemented in close collaboration with the AGRUFIN programme, GIZ development advisors, and with local partners on a national, meso-, and micro-level in order to benefit from linkages and synergies and to embed the activities into permanent and sustainable structures