Stanbic Bank Uganda's initiatives to reduce the financing gap in the agribusiness sector

What is the role of Stanbic Bank Uganda in the agribusiness sector?

Stanbic Bank Uganda's agribusiness segment works with all customers within the agriculture space. We look at the value chain from input suppliers, smallholder farmers, aggregators, and processors. We also engage with non-government organizations (NGOs), development institutions and ministry agencies working together to make a difference. Our role is running through that whole value chain to understand the needs of different actors and develop solutions to meet the requirements. We ensure that the solutions help them achieve their needs, and in case they require long term support, we work and walk with them along that journey.

How is the bank facilitating access to finance for the agribusiness sector? 

The bank has several initiatives in place to facilitate access to finance for the agribusiness sector.

First, we've got a new initiative called the One Farm platform. Here, we partner with Agri-techs, who collect data from farmers and agribusinesses, analyze it to understand their requirements and provide solutions through the platform. Some of the services offered include input financing, agronomy training, insurance and information on markets. This initiative has helped to improve financial inclusion for several actors in the agribusiness value chain.

The other initiative is providing affordable loans to Savings Credit and Cooperative Societies (SACCOs) and farmer groups. Agricultural Business Initiative (aBi) and Alliance for Financial Inclusion (AFI) have provided Stanbic Bank Uganda with funds to lend at a subsidized interest rate to SACCOs and farmer groups. SACCOs receiving these funds can offer affordable loans to their members as well. We are also helping the SACCOs and farmer groups digitize records for a faster lending process.  

The third initiative is through the bank's conventional offerings, which cut across the different value chain players from actual farmers, input providers to processors. Essentially, we have short-term and long-term loans, invoice discounting, stock financing, and versatile asset financing. We also have the Flexi pay wallet that enables users to receive and pay for services and commodities from one wallet to another at no charge. 

What can SMEs do to overcome disruptions resulting from the pandemic effects?

We all understand the impact of the pandemic, and we need to protect ourselves and keep safe. It means we have to go into the digital marketplace. Embracing digital tools will keep you safe and enable you to reach more customers than sitting on waiting in one place for these customers to come to you.

Suppose businesses want to last and withstand the pandemic effects. In this case, they need good business plans, financial records and a strategy to follow through during this period. It will ease access to financing that they can use for operations to adapt to the current and future changes. 

Financial institutions also need to play more in this space by supporting SMEs prepare the necessary records and plans to access the financing required. 

Stanbic Bank Uganda has the following initiatives to facilitate access to finance for the sector:

• The bank uses the One Farm platform to profile farmers and agribusinesses. We understand their needs and provide solutions such as input financing, agronomy training, insurance, and information on markets.
• Stanbic Bank Uganda is increasing access to affordable finance to the farmers through their SACCOs and farmer groups by lending to the SACCOs and farmer groups at a subsidized interest rate.
• The bank provides several financial products to the sector, including short-term and long-term loans, invoice discounting, stock financing, and asset financing.
• Using the Flexi pay wallet, clients receive and pay for services or commodities from one wallet to another at no charge. 

Keep in mind that agribusinesses need to have in place good business records, plans and a clear strategy to access financing during these challenging times. 

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