Centenary Rural Development Bank was founded in 1985 by the Ugandan Catholic church with the objective of serving the rural poor and contributing to the overall economic development of the country. Following years of strong growth, it has become the second largest financial institution in the country. In spite of this success, the Bank has remained focused on its initial target clients. The bank has defined a “Mission Critical Portfolio”, which includes microfinance, MSMEs and agriculture loans, and accounts for 47% of its total portfolio as at end of 2021. The bank has the objective to grow it up to 54% by 2026.
To support the development of Centenary Bank’s impactful activities, Proparco has granted the bank a credit line and two guarantees amounting to a total support of UGX equivalent of UGX 105 billion:
- Proparco’s UGX 65 billion credit line (EUR16.5 million) will support the growth of Centenary Bank’s Mission Critical Portfolio towards microfinance, agriculture and MSMEs. This project is carried out with the support of the French Government.
- A UGX 20 billion (EUR 5 million) guarantee to help Centenary Bank in supporting MSMEs that have been particularly affected by the Covid-19 crisis. This guarantee offer was made possible thanks to resources specially allocated by the French government, as part of the Resilience component of AFD Group’s Choose Africa initiative.
- Another UGX 20 billion (EUR 5 million) EURIZ guarantee which will cover up to 70% of loans granted to micro and small enterprises. Launched in May 2019 with the support of the European Union (EU), the European Development Fund, and the Organization of African, Caribbean and Pacific States (OACPS), the EURIZ guarantee aims to facilitate access to credit for MSMEs, in particular in sectors with a high development impact, in order to help them play their essential role in economic growth and job creation.
The credit line and two guarantees will contribute to Choose Africa, the French initiative dedicated specifically to African entrepreneurs, start-ups and MSMEs. This initiative is being implemented by AFD Group since 2018.
“This operation is perfectly in line with Proparco and AFD Group’s strategy of encouraging the increase access to finance for small businesses and expanding our support to sectors and segments with high developmental impact. The EFSD and EURIZ guarantees allows us, together with the European Union, to stimulate economic growth in Uganda.Proparco is happy to initiate a promising relationship with Centenary” said Françoise Lombard, CEO of Proparco. “The Bank stands out with a clearly impact-driven strategy and a strong local presence in the rural and most remote parts of the country. Proparco is willing to support the Bank’s clients showing needs only in local currency”.
Speaking at the signing ceremony the Managing Director of Centenary Bank Fabian Kasi said, “Our economy largely has Micro, Small and Medium enterprises and it is therefore key to finance and amplify Centenary Bank’s agenda in supporting MSMEs, agriculture and microfinance institutions.”
“Our partnership with Proparco which includes the line of credit and guarantee will further enhance our Bank’s capacity to support small, medium and agricultural businesses in their growth journeys through flexible collateral requirements and affordable interest rate offerings compared to the market. In so doing, our key mandate to cushion and support these mission critical sectors will be actualized, positively impacting our citizens in rural areas as we aim to eliminate poverty in Uganda, and ultimately boost the Vision 2040 of increasing sustainable production, productivity and value addition in key growth opportunities. “Kasi added.
The project will contribute to SDG 1 (Zero hunger), SDG 5 (gender equality), SDG 8 (decent work and economic growth), and potentially SDG 7 (clean energy) and SDG 13 (fight against climate change).
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Proparco, a subsidiary of Agence Française de Développement (AFD Group) dedicated to the private sector, has been working for over 40 years to promote sustainable economic, social and environmental development. Proparco is involved in financing and supporting companies and financial institutions in Africa, Asia, Latin America and the Middle East. Its action focuses on key development sectors: infrastructure with a focus on renewable energy, agribusiness, financial institutions, health, education, etc.
Its interventions aim to strengthen the contribution of private actors to the achievement of the Sustainable Development Goals (SDGs), adopted by the international community in 2015. To this end, Proparco finances companies whose activities contribute to the creation of decent jobs and income, the provision of essential goods and services, and the fight against climate change. For a world in common.
More information: www.proparco.fr et @Proparco
Centenary Bank is the leading commercial microfinance Bank in Uganda, with 80 branches and 192 ATMs, 5,500 agents across the country. The Bank serves over 2.4 million customers, which is a quarter of the total banking population in Uganda. Its mission is “To provide appropriate financial services, especially microfinance to all people, in a sustainable manner and in accordance with the law.”
Centenary bank is a member of the Centenary Group which consist of two other subsidiaries including Centenary Foundation and Centenary Technology Services.