The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | Uganda’s financial sector is positioning itself for a structural shift toward sustainability-driven finance, with aBi Finance and its partners launching two initiatives that could reshape how banks and microfinance institutions measure risk, attract capital, and compete in a tightening global regulatory environment.
Unveiled at Four Points by Sheraton in Kampala and presided over by Bank of Uganda Governor Michael Atingi-Ego, the programmes target a long-standing weakness in the sector: the gap between growing global expectations on environmental, social, and governance (ESG) standards and the limited local capacity to meet them.
At the core are two parallel interventions. The first, developed with the Uganda Bankers Association, focuses on building capacity around IFRS S1 and S2 sustainability disclosure standards alongside Global Reporting Initiative (GRI) frameworks. The second, implemented with the Association of Microfinance Institutions of Uganda, seeks to embed ESG principles within Tier IV financial institutions entities that serve the base of Uganda’s financial pyramid.
Together, they signal a strategic pivot: sustainability is no longer a compliance afterthought but an emerging determinant of capital flows, institutional credibility, and long-term resilience.
“IFRS S1 and S2 mark a fundamental shift in how our financial sector understands and manages risk, as it requires institutions to go beyond traditional financial reporting and integrate climate and sustainability considerations into governance, strategy, and decision-making. This positions Uganda to strengthen transparency and attract credible, long-term investment, including climate finance,” Atingi-Ego said.
The emphasis on disclosure is not accidental. Globally, capital is increasingly being priced based on ESG performance, with institutional investors demanding verifiable data on climate exposure, governance structures, and social impact. For Uganda, aligning with these standards is as much about competitiveness as it is about compliance.
Yet the transition is starting from an uneven baseline. According to sector insiders, governance structures in many institutions are relatively stronger than environmental and social reporting, creating a credibility gap that could undermine investor confidence.
“Many institutions perform better in governance than in environmental and social areas, and in some cases lack sufficient evidence to support reported ESG performance, raising concerns about credibility,” said Ronald Ocheng the senior research Officer at the Uganda Bankers Association
“This programme is designed will build practical capacity across institutions while supporting compliance with upcoming reporting requirements and strengthening the sector as a whole,” he added.
The second pillar of the initiative the Tier IV ESG framework targets a segment often overlooked in sustainability conversations but central to Uganda’s inclusion agenda. Microfinance institutions, savings groups, and cooperatives form the backbone of rural and informal finance, yet operate with limited regulatory and technical capacity.
For these institutions, ESG integration is less about meeting investor checklists and more about operational survival and trust.
“Tier IV ESG Framework will provide a practical and context-specific approach that reflects the capacity and operational realities of Tier IV institutions, while reinforcing governance, promoting responsible lending, and strengthening environmental stewardship,” said Jackline Mbabazi the Executive Director of the Association of Microfinance Institutions of Uganda.
The business case is clear; stronger governance and transparency can unlock new funding lines, particularly from development finance institutions increasingly prioritising sustainability-linked investments.
The initiatives also reflect a broader shift in development finance strategy, where partnerships and blended finance models are replacing fragmented interventions. Denmark, one of aBi Finance’s long-term partners, framed the programmes within this wider context.
“No single institution or partner can address today’s interconnected challenges alone. Through long-term partnerships, we have demonstrated that patient and well-structured finance can unlock investment, expand inclusion, and improve livelihoods, and these new initiatives are an important step in strengthening a more sustainable and resilient financial system,” said Signe Winding Albjerg the Chief Executive Officer of aBi Finance.
For Mona Muguma Ssebuliba, the chief Executive Officer of aBi Finance, the launch is part of a longer institutional trajectory rather than a standalone intervention.
“At aBi Finance, we remain committed to being a partner to the sector, supporting innovation, building capacity, and driving inclusive growth and sustainability,” she said.
That trajectory spans more than a decade of investment in green and inclusive finance, with measurable outcomes. aBi Finance reports reaching over 2.2 million farmers, more than 70% of them women, with youth accounting for 42% of beneficiaries. Geographic expansion into Northern and Eastern Uganda has also deepened, while the ecosystem has generated over 300,000 jobs.
The new initiatives aim to consolidate these gains while aligning them with Uganda’s broader economic ambitions. The country is targeting a $500 billion economy by 2040, anchored on agro-industrialisation, financial inclusion, and sustainable investment all sectors increasingly influenced by ESG considerations.
