By Mulengera Reporters
The government is planning to transform financing under the Generating Growth Opportunities and Productivity for Women Enterprises (GROW) Project into a more permanent funding mechanism, with the programme expected to eventually operate along the lines of the Uganda Development Bank (UDB).
Dr. Ruth Aisha Biyinzika Kasolo, the GROW Project National Coordinator, said the government does not intend for GROW financing to be a short-lived intervention, signaling a major shift towards establishing a lasting source of affordable finance for women entrepreneurs.
Kasolo said GROW funds would eventually be converted into a structure similar to what entrepreneurs and businesses access through UDB, allowing the financing mechanism to continue supporting Ugandans beyond the current project period.
“The money for GROW is not just money to go. It is money to stay for the lifetime for Ugandans,” Kasolo said.
She explained that the government was working towards establishing a government-owned company through which the GROW financing would continue to operate.
“GROW is a government intervention and the money is owned by government. And the company is going to be a government company,” she said.
According to Kasolo, the planned transition means women entrepreneurs who are already benefiting from the programme should view GROW financing as a long-term opportunity rather than a temporary government project.
“The GROW money is going to be turned into what you see as UDB,” she said.
From project to permanent financing
The proposed transformation could give GROW a life beyond its current project implementation period, potentially creating a dedicated government financing vehicle for women-owned businesses.
Kasolo said entrepreneurs who perform well under the existing programme are likely to have an advantage as the financing mechanism evolves, as they would already have demonstrated their ability to utilise the funds productively.
“The terms are going to be improved over and over and over,” she said, adding that some aspects of the programme would be refined as beneficiaries and financial institutions gain experience.
She assured participating financial institutions that affordable financing would remain at the centre of the programme.
“GROW will continue giving the best long terms to you on the markets. You have better terms,” Kasolo said.
The GROW Project which is under the Ministry of Gender, Labour and Social Development currently combines affordable loans with grants aimed at helping women entrepreneurs expand their businesses and improve performance. Through participating financial institutions, women can access loans ranging from Shs4 million to Shs200 million at a flat annual interest rate of 10 per cent.
Grants to continue, but under scrutiny
While Kasolo said grants under GROW would continue, she warned that the future of the Portfolio Expansion Grant (PEG) component could depend on how effectively participating financial institutions use the money.
The government has raised concerns that some banks and other participating financial institutions are holding onto PEG funds for long periods instead of using them to expand outreach and generate demand for GROW financing.
Kasolo said this could undermine the sustainability of the grant component even as the government works to establish GROW as a long-term financing mechanism.
“We might end up not sustaining the PEG,” she warned.
She said government was particularly concerned about institutions that have received large PEG allocations but have used only a small portion of the money or have failed to translate the funding into increased lending.
The contrast, she suggested, is that the core GROW financing is intended to become a lasting government asset, while grant resources must demonstrate clear results to justify continued allocation.
Government wants stronger bank partnership
Kasolo also challenged participating financial institutions to treat GROW as a strategic partnership with government rather than simply another lending programme.
She said performance reports from the programme are closely monitored by government, including at Cabinet level, because GROW is viewed as an important intervention for expanding economic opportunities for women.
“GROW becomes an issue in Cabinet,” she said.
The government is consequently pushing banks to expand their presence in underserved districts and develop innovative ways of reaching women entrepreneurs, including those in remote communities, refugee-hosting areas and among people with disabilities.
Kasolo cited areas such as Buvuma, Arua and Bushenyi as examples where participating financial institutions need to strengthen their outreach.
She said banks should be prepared to adapt their use of expansion resources to local conditions, including using mobile outreach models and other innovative approaches where establishing conventional branches is difficult.
A long-term bet on women entrepreneurs
The proposed UDB-style evolution of GROW would represent a significant change in how government supports women-owned businesses, shifting the initiative from a project-based intervention towards a potentially permanent financing platform.
For women entrepreneurs, Kasolo’s message was that GROW should be viewed as more than a one-off source of cheap credit.
“Just know that you are the programme for a long haul,” she said.
She added that the government expects the financing mechanism to grow and become increasingly refined as more entrepreneurs and financial institutions participate.
The government is now reviewing the performance of participating financial institutions, including their regional and district expansion, utilisation of PEG funds, reporting and due diligence, as well as environmental and social requirements.
The review is also expected to inform the transition to the GROW online reporting system and address emerging challenges affecting implementation.
If successfully implemented, the proposed transition could turn GROW from a time-bound women empowerment project into a permanent government-backed financing institution—giving women entrepreneurs continued access to affordable capital long after the current project ends. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
