50 Years of Backing SMEs and Creating Jobs in Uganda


50 Years of Backing SMEs and Creating Jobs in Uganda

“Fifty years is not a short time by any means, but CDC has stuck with DFCU for 50 years. Even through the difficult times they’ve been with us. This is very important, for us to have a long-term shareholder who is committed and dedicated to the growth of DFCU, and who believes in our vision and mission in this country.”


For many companies in Uganda, access to finance is a key factor holding back growth. A recent jobs study by the International Finance Corporation (IFC) confirmed that access to finance is one of the top three limiting factors for businesses seeking to grow and generate employment in developing countries.

In Uganda, there is a lack of long-term funding available for small and medium-sized businesses (SMEs). Most of the funding offered by banks is short-term, but it is long-term finance which is necessary for the growth of most SMEs.

For the last 50 years DFCU has tried to address this shortage of finance in Uganda. DFCU has a special focus on providing SMEs with the long-term funding they need. It concentrates on providing finance for businesses in certain sectors, including education, agribusiness, construction and manufacturing. How CDC’s investment supports DFCU

DFCU was set up in 1964 by the Government of Uganda and CDC. In 2000, DFCU started commercial banking through its subsidiary DFCU Bank. Over the last 50 years, CDC has been an active investor and provided advice to help the bank develop and grow. CDC’s investment in DFCU has allowed the bank to provide the long-term funding to support the SMEs which are vital to Uganda’s economic development. This has enabled businesses across a number of sectors to expand, providing sustainable jobs and an income to hundreds of thousands of people throughout Uganda.

CDC’s financial support has been coupled with wider support, for example through corporate governance and technical assistance. A recent loan of US$10 million from CDC has helped to further strengthen DFCU Bank’s lending capability.

Juma Kisaame, Managing Director, DFCU Bank “DFCU is predominantly an SME bank. Our main strength is in providing long-term funding because there is a real need, there is a big gap in that area. That is where the likes of CDC give us the edge, because they think long-term and they also provide us with the money which we can then use to intermediate.”


Victorious Education Services is a successful business that offers quality education at an afforable price for a growing population.

It has found a market in Uganda and wants to expand but has had trouble finding the money to do so. Set up in 1999, the school found that banks would deny its requests for funding, on the basis that it lacked security.

Victorious turned to DFCU Bank for help. The bank gave Victorious the money it was seeking to buy land to build more schools.

As a result of DFCU’s support, Victorious has grown from three members of staff and 30 pupils in 1999 to 400 staff and 4000 pupils today.

Barbara Ophono Buyondo, Principal, Victorious Education Services “DFCU believed in our dream. They have really been together with us. We have worked together and we have managed to educate all these children in a partnership with DFCU.”


Abubaker Technical Services is a road building business which competes for local contracts.

When Abubaker first started out in 2006, the company found that bank terms were difficult for new businesses. In order to bid for contracts, Abubaker was required to provide a bank guarantee that they would receive a loan to carry out the contract. DFCU was the only bank prepared to provide that guarantee.

The loans that Abubaker has received from DFCU Bank have helped it to buy the equipment it needs. In 2010, the company approached the bank for a loan, and was leased five machines to the value of just under US$300,000.

Today the company employs around 600 permanent and contract staff. It carries out work all over Uganda as well as in Kenya, and is currently working on six different road construction projects.

Hajji Juma Kalema Kutakulimuuki, Managing Director, Abubaker Technical Services “Before going to DFCU we started with other banks and they were not matching what we wanted. If DFCU wasn’t around then we don’t know what we would’ve done.”


Aponye is an agribusiness which processes grain for sale in Uganda and abroad.

When the company started in 2006, it only had two trucks and one small milling machine. DFCU has financed the company’s expansion projects including milling machinery and silos. It now has 35 trucks and improved machinery which can process 240 tonnes a day, and the company is a large supplier of grain to the World Food Programme. As a result, the business now employs 50 permanent staff and 150 contractors.

Aponye is expanding into maize meal, soap and oil refining. These expansion plans will require more staff, and it expects to employ another 50 people at its milling plant.

Apollo Nyegamehe, Managing Director, Aponye “What we have achieved, we have achieved it because of DFCU. DFCU has helped my business to grow.”


Investee Company DFCU
CDC Investment US$15.1m (equity) and US$10m (subordinated loan)
Date of First Investment 1964
Location Uganda

Editor’s Note: This blog was previously published on CDC and is reproduced with permission.

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