The Minister for Gender Labour and Social Development (MGLSD), Betty Amongi Ongom, has clarified that the Grow Loan Enterprise for women under the MGLSD and Private Sector Foundation Uganda (PSFU) is not money meant for startup businesses but rather money to grow already existing businesses.
She said this on October 10, 2024, while addressing members of the press at the Uganda media centre.
“We have heard some women complain that the banks have denied to give them money to start their businesses, but I want to make this categorically clear that the Grow loan is not money for starting up new businesses, but it’s meant to empower women who are already in business and help them boost their existing businesses,” Amongi said.
The Grow Enterprise Loan was launched on August 28, 2024, with over Ugx 98.55 billion, designed to provide affordable financial solutions to women-owned businesses, helping them access capital to expand their enterprises.
The program targets women entrepreneurs in various sectors, including agriculture, trade, and manufacturing, with a special focus on small and medium-sized enterprises (SMEs).
Amongi’s remarks came after some women raised a grievance that they have approached Grow Loan-aligned banks but have been turned away; some say that the banks ask for collateral security, which some women do not have.
According to Ruth Kasolo Biyinzika, the project coordinator for the Grow Loan, within two months, the government is going to allow other microfinance institutions to help women who can’t access the loans from the banks.
“About the loan needing collateral security, we are already bringing on board Sacco’s and microfinance support institutions in two months where you can be guaranteed by the group where you belong. And also, the banks do accept both movable and non-movable collateral and not just land titles as many claim,” Biyinzika said.
Biyinzika also confirmed that so far the Grow loan is a success, and out of the Ugx 26 billion that was given to the banks, already Ugx 18 billion have been lent out to women entrepreneurs.
Biyinzika further added that over 83% of the loans secured are in the range of Ugx 4-20 million, and most of the loans are being made towards priority sectors of agriculture (along different value chains), real estate, and trade.
The grow loan is being given out in Post Bank, Centenary Bank, Finance Trust Bank, DFCU Bank, and Equity Bank. Arrangements are being finalized to bring Stanbic Bank onboard.
The amounts that are being given out to the eligible beneficiaries range from Ugx 4 million to Ugx 200 million for a period of up to twenty-four (24) months. Currently, the five commercial banks are offering the GROW loans at a rate not exceeding 10.5% per annum, with no loan application or arrangement fees, making the actual interest paid even lower.
