Women’s Bank’s partnership in Uganda opens new growth opportunities for women-led businesses

Women’s Bank has a long history of supporting women’s entrepreneurship in developing countries through savings and loan groups. These have proven to be effective ways for women to start small businesses and generate their own income.

Now, a new pilot partnership is being launched in Uganda with a local financial services and investment firm SHONA Capital to provide even stronger support for women entrepreneurs.

“We are truly excited about this new initiative, which gives Ugandan women entrepreneurs access to larger financing than before to help develop their businesses”, says Maria Paatero-Kaarnakari, who leads the Women’s Bank’s volunteer development team.

“This collaboration is part of the ongoing evolution of Women’s Bank’s work as we seek increasingly impactful ways to respond to major changes in the operating environment”, she adds.

The fund focuses on agriculture and food systems

The joint IMARA loan fund established by Women’s Bank and SHONA Capital has an initial capital of USD 400,000 (approximately EUR 345,000), with half contributed by Women’s Bank and half by SHONA Capital. The fund provides interest-bearing loans ranging from USD 5,000 to USD 50,000 for eligible businesses.

Loan terms typically range from 6 to 24 months. Repaid loans are recycled back into the fund to finance new loans.

“We are focusing especially on agriculture and food systems, as Women’s Bank has strong experience in these sectors in Uganda from the very beginning”, says Paatero-Kaarnakari.

SHONA Capital also provides professional business development support to funded companies, including guidance in marketing, sales, financial planning, and business monitoring.

In 2019, Women’s Bank established its first social enterprise in Uganda, the Chiggi poultry farm. The egg production business provides jobs and income for local women organized under the Mityana cooperative.

One of the goals is to provide growth financing also to Mityana cooperative members who meet the IMARA loan criteria.

A new financing model responds to challenges faced by women entrepreneurs

The loan financing is targeted at women-owned registered businesses with at least two years of operating history and a proven track record of profitability.

“These are not small start-up loans. The aim is to help businesses already operating in agricultural and food value chains develop and grow, while strengthening the local economy”, Paatero-Kaarnakari explains.

This financing model is especially needed to support small and medium-sized businesses owned by women. Ivan Mandela, founder and CEO of SHONA Capital, explains the structural barriers many women entrepreneurs face.

“SHONA Capital was established to support businesses that fall outside the focus of other financiers – businesses that are too large for microfinance, too small for banks, or not attractive enough for venture capital. Many of these underserved businesses are women-owned enterprises. Banks and traditional lenders often require collateral, typically land ownership, to secure loans.”

“In our society, women’s opportunities to own land remain limited. Together with Women’s Bank, we can now address this systemic problem through the IMARA loan facility, which offers women entrepreneurs affordable financing without requiring collateral. That is why we are so excited about this partnership”, says Mandela.

Businesses applying for loans go through a thorough evaluation process. Final loan decisions are made by an investment committee that includes representatives from Women’s Bank and Finn Church Aid’s Uganda country office.

The committee also monitors loan repayment and evaluates the impact of the initiative.

Local expertise strengthens the partnership

SHONA Capital was selected as the partner after an extensive assessment process. Potential partners in Uganda and Kenya were identified together with local experts and international networks.

The selection emphasized strong experience in SME financing and a proven track record in supporting women-led businesses. SHONA Capital is a fund management company fully owned by the development organization SHONA Group, whose strong values align closely with those of Women’s Bank.

SHONA Capital is responsible for evaluating potential loan recipients, monitoring funded businesses, and supporting entrepreneurs throughout the loan period. The model also includes mentoring and coaching to maximize each company’s chances of success.

Paatero-Kaarnakari notes that the initiative is initially a pilot, and the lessons learned and results achieved will be used to further develop the model in the future.