EIB Global, a division of the European Investment Bank (EIB), and Uganda’s Housing Finance Bank (HFB) have announced a collaborative initiative to invest €50 million to support private sector entities, particularly Small and Medium Enterprises (SMEs) in Uganda. The partnership places a special emphasis on gender inclusivity, aiming to improve women’s access to finance by allocating at least half of the investment funds to businesses owned, run, or serving women.
This strategic intervention is anticipated to significantly impact women entrepreneurs and customers of Housing Finance Bank, particularly those engaged in micro, small, and medium enterprises in critical sectors such as agriculture, health, manufacturing, transport, trade, education, renewable energy, and clean water.
Aligned with both Ugandan and European Union priorities, the project aims to foster inclusive growth and sustainable economic development by supporting women-led businesses. Gender inclusion is a key aspect of Uganda’s Vision for 2040, emphasizing the importance of providing enhanced opportunities for women to reduce gender inequalities and drive socio-economic transformation.
The EIB, as the first multilateral lender to endorse the 2X Challenge Criteria, commits to dedicating at least 30% of its investment support to businesses meeting specific gender-related criteria. This includes businesses with a majority ownership by women, a female business founder, a senior leadership or board composition comprising 30% of women, a workforce consisting of 30-50% women, or companies offering products or services specifically benefiting women. In a notable demonstration of commitment, the EIB and HFB have decided to raise the threshold from 30% to 50%, aligning with the European Commission’s recommendation.
Edward Claessen, the EIB Head of the Regional Hub for East Africa, emphasized the importance of this partnership during the signing ceremony. He stated, “Signing this partnership on the eve of International Women’s Day celebrations in Uganda re-emphasizes our continued strong support in the way of entrepreneurship and business development for all entrepreneurs, more so women.”
Housing Finance Bank, previously in collaboration with the EIB, signed an investment partnership of €13 million in 2012 under the East and Central Africa Private Enterprise Finance Facility project. As the 9th largest commercial bank in Uganda, HFB focuses on consumer banking, business banking, and housing finance. The collaboration with the EIB aims to empower women-led MSMEs as part of the bank’s broader 2023-2027 strategic plan.
Michael Mugabi, MD/CEO of Housing Finance Bank, highlighted the bank’s commitment to strategic partnerships and its dedication to socio-economic development through enabling MSMEs, especially those owned by women. The new line of credit and technical support grant will be utilized to enhance the capacity of women-led businesses and MSMEs in general.
Beyond this collaboration, entrepreneurs in Uganda also stand to benefit from the EIB’s SheInvest initiative launched in 2019, aiming to mobilize €2 billion of gender-responsive investment across Africa, with a focus on empowering female-led businesses.
In addition to its public sector lending to governments, the EIB recognizes the pivotal role of strong financial intermediaries in addressing market challenges. EIB Global, leveraging its extensive experience and partnerships with banks, microfinance institutions, and equity funds, supports these entities in innovating and expanding their financial inclusiveness. The initiative also extends its support to non-banking financial institutions, such as guarantee funds, leasing companies, or fintechs, with financial models to reach underserved smaller businesses.
Over the years, the EIB, in partnership with various financial institutions in Uganda, has provided over €278 million to support private sector businesses, particularly in agriculture and gender thematic sectors. Accompanying technical assistance has been offered to address a wide range of topics, including risk management, product development, environmental and social assessment, and financial literacy.
