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Kampala, Uganda | THE INDEPENDENT | dfcu Bank has called for stronger integration among financial institutions, regulators and central banks in East Africa to improve access to capital, strengthen industrial competitiveness and facilitate cross-border trade.
Speaking at the Regional Industrialisation Conference organised by the Private Sector Foundation Uganda (PSFU) at Serena Kampala on August 18, dfcu Bank Chief Executive Officer Charles Mudiwa said the region’s industrial ambitions could not be achieved through conventional bank lending alone.
Mudiwa said financial institutions need to adopt a broader understanding of capital by supporting businesses with market intelligence, technical expertise and human capacity alongside financing.
“Capital is far more than cash. Capital is market intelligence, knowing where, how, and when to sell. Capital is also human capability, the technical skills and competencies needed to deliver value,” he said.
Mudiwa said Micro, Small and Medium Enterprises (MSMEs), which form a significant part of East Africa’s private sector, require a combination of technical skills, financial knowledge and affordable, patient capital to grow sustainably.
He said dfcu Bank has responded to this challenge by committing 1% of its annual net profits to the dfcu Foundation to support catalytic financing initiatives.
Under the model, selected MSMEs receive interest-free funding and repay the principal alongside a small administration fee, reducing the burden associated with conventional borrowing.
Mudiwa said the approach is intended to give businesses the financial space to invest in production, expand their operations and access new markets rather than directing a significant share of their earnings towards loan interest.
He cited dfcu’s support for agricultural value chains as an example of how targeted financing can help producers move higher up the value chain.
Among the initiatives is support to cocoa farmers in Kasese in partnership with Rabobank under the SEED programme, aimed at helping producers transition from primary production towards commercial chocolate manufacturing.
He also cited school-based poultry initiatives as another intervention designed to strengthen production capacity and improve the ability of beneficiaries to participate in commercial value chains.
According to Mudiwa, the bank is now looking at how to scale the catalytic financing model so that businesses can progress from serving local markets to competing in regional and international export markets.
He said this requires finance to be combined with enterprise development, market access and skills so that businesses are equipped not only to borrow but also to grow and compete.
PSFU Chief Executive Officer Stephen Asiimwe said financial reforms must be accompanied by practical measures to improve the regional business environment.
Asiimwe called for closer collaboration between governments and the private sector to turn East African integration commitments into tangible improvements in the movement of goods, services, people and capital.
He said regulatory and logistical barriers continue to undermine the competitiveness of businesses operating across borders and called for greater coordination among governments and institutions.
According to Asiimwe, reducing the time and cost of moving goods across borders should betreated as a key competitiveness priority because delays increase transport and financing costs while also causing businesses to lose potential market opportunities.
He said regional integration should therefore move beyond policy commitments to reforms that make it easier and cheaper for businesses to trade across East Africa.
For Mudiwa, a more integrated financial ecosystem would complement these reforms by making capital more accessible while equipping businesses with the skills and market knowledge required to take advantage of regional opportunities.
The call comes as East African countries seek to expand industrial production, increase intra-regional trade and create more competitive businesses capable of participating in global value chains.
For financial institutions, the challenge is increasingly shifting from simply providing credit to helping enterprises become productive, resilient and capable of scaling beyond their domestic markets.
