GROW project: how districts shared sh50b women’s loans

A total of 2,175 women from 86 districts and three cities in Uganda have so far accessed up to sh50b in loans under the Generating Growth Opportunities and Productivity for Women Enterprises (GROW) project.

The project, which is being financed with a $217m grant from the International Development Association of the World Bank, became effective on January 20, 2023, with the gender ministry as the lead implementer and the Private Sector Foundation Uganda (PSFU) as the implementing entity.

The project offers loans at 10%-10.5% interest rates. It aims at increasing access to entrepreneurial services that enable female entrepreneurs to grow their enterprises in targeted locations, including refugee host districts.

According to the Quarterly Progress Report for the period October-December 2024, the amount of funds approved by Government and disbursed to the six participating financial institutions (PFIs) to date is sh120b, for their two years participating agreement, targeting to reach at least 4,000 borrowers in the first year.

“The cumulative number of GROW loans disbursed is 2,175 within the three funding levels and totals to sh50.2b in 86 districts and three cities. Three-thirds (1,629) are in Level 1 (sh4-20m); 13% (284) in Level 2 (sh20m-sh40m) and 12% (262) in Level 3 (sh40msh200m),” the report reads.

It further noted that 30.5% of the loans went to women in Level 1, 17.2% in Level 2 and 52.3% in Level 3.

Ninety-nine per cent of the GROW loan borrowers are individual women entrepreneurs, with the majority in trade and commerce, while 24% are in agriculture.

Bank performance

The report further reveals that Centenary Bank has given out the most loans, with 728 borrowers, followed by Finance Trust Bank with 570, PostBank with 557, dfcu Bank with 209 and Equity Bank with 111, so far.

In terms of funds disbursed, Centenary Bank has given out sh13b out of the sh22b it was given for the two-year period.

Dfcu Bank has given out sh11b out of sh22b, Equity Bank has loaned out sh1.8b out of 7.5b, Finance Trust Bank has released sh12b out of sh22b it was allocated for two years.

PostBank, on the other hand, gave out sh11b out of sh22b and Stanbic Bank, which was allocated sh22b for two years, had given out none during the period under review.

Maginalised groups from around the country have also benefited from the GROW loans and the leading PFI in the endeavour is PostBank.

The marginalised groups include refugees and persons with disabilities.

The report further says that the majority (45.4%) of the loans were disbursed in Greater Kampala, including 24.5% in Kampala city.

“The 24.5% of the total loans disbursed to women in Kampala include 33 women entrepreneurs specifically in Nakawa division that received a total of sh1.1b,” the report shows.

“The Greater Masaka region received 9.7% of the loans, while Ankole region obtained 8.5% of the loans. In ensuring equity across the country, Cabinet guided on 19 regions of the country, and the PFIs are responding to this zoning for re-allocation of the GROW funds,” the report reads.

Dr Ruth Aisha Biyinzika Kasolo, the co-ordinator of the GROW project, said since August last year, PSFU — with guidance from the World Bank — initiated the redesign of their outreaches to concentrate on five aggregated sectors, which include health, beauty and wellness, agriculture and agribusiness, textiles and manufacturing, creatives, tourism and ICT, construction and engineering.

“We will be giving out sector-specific training for women entrepreneurs in addition to providing business development services, including business compliance support, pre-financing and post-financing business development services.

Biyinzika said women entrepreneurs who pay back their loans as scheduled, halfway through their loan period, receive a GROW bonus of 5% of their loan size.

“Refugee women and women in refugee-hosting districts receive a bonus of 8% of their loan size,” she said, adding that the incentive is intended at establishing the women entrepreneurs as credible borrowers who can continue to utilise financial services from these institutions beyond the tenure of the project.

Biyinzika said the PFIs will continue to carry all the credit risk and are required to pay back to the Government all the money disbursed to them.

SACCOS

Biyinzika said in terms of the next steps, the GROW project will continue disbursing funds, with the subsequent tranches refocusing resources to the underserved areas such as Madi, Elgon, Greater Mubende and Karamoja.

She said they are in the process of finalising approval of microfinance institutions as well as savings and credit co-operative societies to implement the GROW loan in the targeted regions currently underserved by the PFIs.

Challenges

“There is a continued outcry and complaints from women who do not have established businesses or lack sufficient cash flows to qualify for the GROW loan, as being excluded from this highly lauded government initiative,” the report reads.

The project targets women entrepreneurs who have graduated from various government livelihood and emancipation programmers (Parish Development Model, Emyooga, Uganda Women Entrepreneurship Programme and the Youth Livelihood Programme), whose businesses should be productive and able to pay back the borrowed funds.

The report further showed that there is notably high demand for the GROW loan, requiring additional funds allocation from the Government.

When it comes to the issue of collaterals, some women reportedly do not have the required collateral for larger amounts of loans, even when their business have the cash flows for repayments.

The report further says there is widespread lack of the required business records and cash flows needed for the GROW loan application.

Loan requirements

To be eligible, women must own at least 51% of the business enterprise. Requirements depend on the awarding bank.

Major requirements include possession of a bank account, national identification, proof of cashflows (one-year bank statement).

Others are collateral (as applicable like land title, land sales agreement) and proof of businesses (trading licence).

What women say

Olivia Nagayi, the secretary of Rawi and Barre Stationers, on Nasser Road (Kampala) said: “We are grateful to the Government for prioritising women entrepreneurs. For the very first time, we are feeling appreciated that we can make a contribution to this economy.

However, taxes are killing us. With the sh42m GROW loan which I obtained through PostBank, I was able to build three double rooms, from which I expect to collect sh400,000 per month. The tax collectors are already on my case asking for property rate.

Julie Komukama, a resident of Kireka, Kiganda in Kampala said: “I have a depot for drinks and I sell mineral water, sodas and beers. I obtained a GROW loan amounting to sh7m through Finance Trust Bank and I am supposed to pay back in one year. I am grateful to the gender ministry and the GROW project officials for bringing us this low-interest loan facility. My request is that they bring us regular training so that we become better business managers. I know I can service my loan easily if I get financial management skills.”