aBi Finance Ltd, a leading wholesale impact investment company has recommitted to continued support to smallholder farmers by providing green inclusive financing.
The commitment was made during an engagement with stakeholders under the theme, “Accelerating adoption of green inclusive finance for climate change adaptation, mitigation, and biodiversity conservation" held at Kampala Serena Hotel.
During the meeting, officials said aBi Finance has been at the forefront of deploying funds to foster resilience against climate change through climate change adaptation, wealth creation, employment, and economic growth for smallholder farmers and agribusinesses.
Working alongside actors in the financial services sector, aBi Finance utilizes a mix of financial instruments to strengthen financial institutions’ ability to provide credit to smallholder farmers and agribusinesses.
These interventions are guided by Environmental Social and Governance (ESG) principles, ensuring an inclusive focus
on planet, people and profits to promote long-term sustainability.
Between 2022 and 2024, aBi Finance has implemented several green finance interventions which include the following; In partnership with the Global Green Growth Institute (GGGI) developed the green agribusiness taxonomy to enable financial institutions classify green investments with they are financing.
This was followed by the development and distribution of green Information, Education and Communication (IEC) materials to 1,000 branches of 52 partner financial institutions.
aBi Finance developed or updated environmental policies and green loan products for 40 partner financial institutions.
Other interventions implemented included the enhancement of Management Information Systems (MIS) of 27 financial institutions to report green loans, development of the ESG framework for Tiers 1,2 and 3 financial institutions in partnership with the Bank of Uganda (BoU) and Uganda Bankers Association (UBA).
aBi Finance is currently working on developing the ESG framework for Tier 4 financial institutions in partnership with Uganda Microfinance Regulatory Authority (UMRA), Uganda Cooperative Savings and Credit Union Limited (UCSCU), the Association of Microfinance Institutions of Uganda (AMFIU), the Financial Technologies Service Providers
Association (FITSPA).
aBi Finance is also partnering with Uganda Institute of Banking and Financial Services (UIBFS) to develop a curriculum to enable broad-based learning about green finance, ESG, Sustainability in the Uganda context.
In line with its strategic focus, aBi Finance recently launched a new business plan for 2024- 2028, setting ambitious targets aimed at promoting climate resilience and economic empowerment for Uganda’s smallholder farmers and agribusinesses.
Through this plan, the company seeks to reach 83,000 smallholder farmers with at least 40% of beneficiaries are
expected to be women, and 40% youth.
As a vital sector in Uganda’s economy, agriculture supports millions of households, especially in rural areas, making sustainable investment essential to climate resilience and economic growth.
According to the Ministry of Agriculture, Animal Industry and Fisheries (MAAF), Agriculture sector performance from FY 2018/19 - 2022/23 reported that the gross value added for agriculture, forestry and fishing sector was shs 43 billion in FY 2022/23 compared to shs 39 billion registered in FY 2021/22, reflecting a 12.5% increase.
The Agricultural sector had a contribution of 23.8% to Gross Domestic Product in FY 2022/23 compared to 24.1% in FY
2021/22.
“In green financing, we are looking to focus particularly on climate change adaptation that will support beneficiaries to be resilient to the shocks that are being brought about by climate change. We will not forget and we will continue to target underserved regions in Northern, Eastern Ugandan, underserved demographics, women, youth, and refugees. They remain a core for us as they have been over the last 14 years," said Mona Muguma Ssebuliba, the CEO of aBi Finance.
Since launching the new business plan in May, aBi Finance has already disbursed over shs. 30 billion in green finance to 20 partner financial institutions.
These institutions have in turn lent it out to smallholder farmers and agribusiness deploying over 90% of it in climate change adaptation investments.
aBi Finance aims to increase its portfolio of green finance from the current 15% to at least 75% by 2028.