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“I used to produce fewer than three bags of dried coffee. Now I produce more than ten.”
This quote comes from a farmer supported by the Ugandan microfinance institution Ugafode. It perfectly sums up what goes on at the institution’s branches. Since 1994, Ugafode has chosen to establish a strong presence in rural agricultural areas, particularly in the western and southwestern parts of the country.
Thirteen years after we took a stake in the company, SIDI is increasing its stake alongside new international investors. A look back at a partnership that demonstrates just how much patience and close collaboration pay off.
Growth in Support of Our Social Mission
The recent figures speak for themselves: nearly 100,000 customers and 350 full-time employees; a loan portfolio that has doubled in three years to reach 30.8 million euros; and a very solid business model. But the company’s true success also lies in the high standards of its mission.
In an industry where the trend is toward urban concentration, Ugafode has taken the opposite approach: 60% of its clients live in rural areas. More than half of its loans (51%) finance agriculture. By supporting this rural momentum, Ugafode enables thousands of small-scale farmers and rural microentrepreneurs to generate value in their communities, thereby contributing to a transition toward a more equitable economic model.
Tangible results: 86% of clients see their incomes increase[1]. In addition, 27% of them report a marked improvement in their quality of life, and 15% report greater resilience in the face of economic shocks. And business is growing enough to create jobs: the average number of employees per client has risen from 2.2 to 4. Ugafode doesn’t just provide financing to individuals—it helps shape the local economy.
[1] Ugafode participated in the 60 Decibels Microfinance Index in 2023, a leading organization in measuring customer perception in the microfinance sector. This data is derived from that index.
Inclusion that leaves no one behind
What sets Ugafode apart is its ability to serve some of the most vulnerable populations.
- Refugees: The organization is a pioneer in this field, with two of its offices located directly in the camps, helping to restore financial independence to populations facing extreme hardship.
- Women: The loan program specifically designed for them has been a great success and now accounts for nearly 30% of the portfolio.
This social commitment is at the heart of Ugafode’s business model. And it is precisely this alignment with SIDI’s values that has motivated our decision to stand by Ugafode for the past thirteen years and to reinvest in the company this year.
SIDI: A Long-Term Commitment
The road hasn’t always been easy. Health crises, agricultural epidemics, operational challenges: Ugafode has weathered some turbulent times. It is in moments like these that a shareholder’s commitment is truly tested. Where others might have sought a quick way out, SIDI chose loyalty.
We have stayed the course, convinced by the quality of the management team and the soundness of the model promoted by Ugafode. This consistency sent a strong signal. It reassured the market and opened the door to leading institutional investors, such as the Norwegian sovereign wealth fund through Abler Nordic, which is now taking a stake in the company. Our long-standing presence has served as a mark of trust and validated Ugafode’s strength in the eyes of international impact finance stakeholders.
SIDI’s Support: A Catalyst for Transformation
In keeping with its business model, SIDI is providing Ugafode with long-term support by combining equity investment, financing—notably through the FEFISOL fund—and the provision of consultants to assist with the institution’s governance and transformation.
This long-term commitment proved particularly crucial during the difficult periods the MFI faced. In 2014, SIDI appointed a volunteer consultant, Michel Dubois, to represent it on Ugafode’s board of directors. A former finance professional, he supported the institution during the management crisis it faced in the late 2010s, marked in particular by the departure of the director at the time. Deeply involved in governance, Michel Dubois helped strengthen governance practices, secure the portfolio, and put a new management team in place.
Since 2019, Richard Emuye, a Ugandan consultant and digital transformation expert, has represented SIDI on the Board of Directors. As the institution faced major challenges related to cybersecurity, system modernization, and digital fraud prevention, he chaired the Innovation and Digital Transformation Committee. His expertise has notably contributed to strengthening the security architecture and accelerating the institution’s digital transformation. The results speak for themselves: Ugafode is the only regulated institution in Uganda to have experienced no cybersecurity incidents since 2021.
These efforts have enabled the institution to achieve several key milestones: stabilizing its banking system, digitizing informal savings groups in underserved rural areas, rolling out a mobile banking service—now actively used by 90 percent of registered users—and implementing online tuition payments.
Ugafode’s experience thus provides a concrete example of what SIDI’s support brings to the table: in times of crisis as well as during periods of transformation, its administrators—whether volunteers or local representatives—devote their expertise and time to strengthening and developing its partners. “There is no doubt that Ugafode is now a strong and resilient institution,” says Richard Emuye. SIDI’s long-term commitment has contributed to this resilience.
On to the next section
Today, Ugafode is gaining traction. The ongoing capital increase is not intended to change the company’s strategy, but rather to build on its existing success: deepening its rural presence, expanding its impact on women and refugees, and continuing to drive digital innovation.
For SIDI, this increased involvement is the logical next step based on a firm belief: when solidarity-based investment is patient and combined with on-the-ground expertise, it helps build local institutions capable of bringing about lasting change in people’s lives. Ugafode is a perfect example of this.
