On monday the government of the Republic of Uganda and the International Fund for Agricultural Development (IFAD) signed a US$29 million loan agreement to finance the Project for Financial Inclusion in Rural Areas (PROFIRA). This project aims to sustainably increase access to and use of financial services by rural populations in Uganda. With a total cost of $36.6 million, the project is cofinanced with $4.9 million contribution from the Government of Uganda and $1.4 million contribution from the beneficiaries themselves. The financing agreement was signed today in Rome by Grace Dinah Akello, Ambassador and Permanent Representative of Uganda, and by Michel Mordasini, Vice-President of IFAD. The supply of financial services to rural areas in Uganda is still very limited, falling significantly short of demand, said Mordasini during the signing ceremony. In these areas, community-based savings and credit groups are the only financial intermediaries responding to financial services demands of the rural people. The financing agreement we are signing today is tangible evidence of our ongoing joint collaboration with the Government of Uganda to alleviate poverty. PROFIRA is designed to help 576,000 financially excluded rural households, particularly women and young people, to improve their economic activities and livelihoods. It will also expand and improve the communities access to financial services aiming to increase loans and savings resources available to and used by members. Agriculture is a primary source of livelihoods for the projects beneficiaries. Consequently, the project will focus on increasing agricultural income through enhanced use of improved inputs and other means of production. PROFIRA will also contribute to increase agricultural related trade and commerce and provide opportunities for greater engagement in agricultural processing. The project will be managed by Ugandas Ministry of Finance, Planning and Economic Development through its Microfinance Department. By the end of this seven-year project, it is expected that the project will help increase the income of the project participants, improve food and nutrition security and reduce vulnerability of the rural communities of the country. Since 1982, IFAD has invested a total of $325.5 million in 15 programmes and projects in Uganda, amounting to $1.3 billion when cofinancing is included. It is estimated nearly 5 million Ugandan rural households have benefitted from these investments.
Posted on: Wed, 26 Nov 2014 09:02:21 +0000
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