Why wealth creation funds should become a national devt bank
After investing nearly sh11 trillion in wealth creation programmes, Uganda now has an opportunity to transform these initiatives into a sustainable revolving fund — and eventually a development bank that could provide long-term financing for households, farmers and small businesses.
Dr Ruth Biyinzika. (Courtesy)
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OPINION
By Dr Ruth Biyinzika
After investing close to sh11 trillion in presidential wealth creation initiatives over the years, Uganda has reached a stage where these interventions can evolve into something even more transformative — a self-sustaining revolving fund that eventually grows into a fully-fledged development bank dedicated to financing household enterprises and small businesses.
Programmes such as Operation Wealth Creation (OWC), Emyooga, GROW and the Parish Development Model (PDM) have significantly expanded financial inclusion by taking capital to communities that were previously excluded from formal banking. Millions of Ugandans, particularly farmers, youth, women and small-scale entrepreneurs, have gained access to financing that has enabled them to invest in agriculture, small businesses and other productive ventures.
These programmes have laid a strong foundation for household wealth creation and economic participation. The next logical step is to transform the resources invested into a permanent financial institution that can continue supporting generations of Ugandans without depending entirely on annual government budget allocations.
A revolving fund provides the ideal starting point. Instead of viewing government financing as a one off intervention, loan repayments could be pooled into a central fund that continuously finances new beneficiaries. Every successful repayment would create an opportunity for another entrepreneur, farmer or cooperative to access affordable financing, allowing the same capital to circulate repeatedly throughout the economy.
As repayments accumulate over time, the revolving fund could gradually evolve into a specialised development bank dedicated to financing productive sectors of Uganda’s economy. A future PDM Bank, for example, could become the country’s leading institution for agricultural finance, rural enterprise development, youth entrepreneurship and value addition projects.
This would represent an important evolution in Uganda’s wealth creation agenda. Instead of operating primarily as government programmes, the initiatives would become permanent financial institutions capable of mobilising savings, extending affordable credit and supporting economic transformation over the long term.
The success of such a transition would depend on strong institutional governance. Professional management, independent boards and sound financial oversight would ensure that the revolving fund operates according to prudent banking principles while maintaining its developmental mission. As the institution grows, it could operate within Uganda’s financial regulatory framework under the supervision of the Bank of Uganda, strengthening confidence among borrowers, investors and development partners.
Equally important would be the adoption of rigorous lending practices. Future financing should continue prioritising productive sectors that generate employment and increase national output, particularly commercial agriculture, manufacturing, artisanship and information and communication technology. Careful credit assessment, enterprise evaluation and business planning would help ensure that financed projects remain commercially viable while generating sustainable returns.
The existing network of parish SACCOS and Emyooga groups provides an excellent foundation for this transformation. These community-based financial institutions have already established relationships with local entrepreneurs and understand the economic needs of their respective communities. Strengthening them into fully compliant and professionally managed SACCOS would create an extensive nationwide distribution network capable of delivering financial services efficiently.
Financial literacy should become an integral pillar of the new model. Access to affordable credit yields the greatest benefits when borrowers possess the skills to manage businesses successfully. Continuous training in financial management, enterprise development, record keeping, marketing and investment planning would improve repayment performance while increasing business survival rates.
Uganda’s agricultural sector presents perhaps the greatest opportunity for such a bank. Agriculture remains the country’s largest employer and contributes significantly to exports and household incomes. A specialised development bank could finance the entire agricultural value chain — from production and irrigation to storage, processing, transportation and export marketing.
Integrating agricultural insurance through the Uganda Agricultural Insurance Scheme would further strengthen the sustainability of the revolving fund by protecting farmers and lenders against climate-related losses, crop failure and other unforeseen risks. Such protection would preserve capital while enhancing confidence among both borrowers and financial institutions.
Government has already indicated that the next phase of the Parish Development Model will emphasise increased productivity, value addition and improved market access. A specialised PDM Bank could become the financial bridge connecting these objectives by providing long-term capital to support agro-processing industries, rural manufacturing, logistics, storage infrastructure and export-oriented enterprises.
As PDM continues expanding, with millions of beneficiaries participating in productive economic activities, the volume of repayments could create a substantial financial resource capable of sustaining future lending for decades. Instead of relying solely on fresh budget appropriations, Uganda would have built a permanent institution that continually recycles capital into productive investment.
The vision of transforming presidential wealth creation initiatives into a revolving fund and, ultimately, a national development bank is, therefore, not simply about creating another financial institution. It is about preserving public investment, multiplying its impact and creating a sustainable engine for inclusive economic growth.
The writer is a woman empowerment advocate and member of the Board of the Presidential CEO Forum