DTB urges SMEs to Adopt Green Financing

Small and medium enterprises (SMEs), the backbone of Uganda’s economy, have been urged to adopt green financing solutions to foster sustainable development and socio-economic transformation in the country. Speaking at the upcoming 2nd Annual Climate Finance Conference, Collin Besigye, the Head of Credit at DTB, emphasized the role of SMEs in driving green innovation, job creation, and wealth generation.

Uganda’s push toward a greener economy is gaining momentum, with increased discussions on sustainable financial practices, carbon markets, and innovative financing mechanisms like debt-for-nature swaps.

At the conference, Besigye discussed the development and promotion of green financial products. “SMEs have the potential to lead the charge in green innovation, but they need access to affordable and accessible financing. By adopting green financing practices, SMEs can not only contribute to Uganda’s environmental goals but also position themselves as key players in the sustainable development of the economy,” said Besigye.

In Uganda, SMEs are critical to achieving the country’s sustainable development goals. However, limited local demand, weak regulatory frameworks, and low awareness of green financing opportunities pose significant challenges. While Uganda is one of the most active participants in Africa’s carbon market, with 33 million carbon, the local market remains underdeveloped, with reliance on international buyers subject to price fluctuations.

“The challenge lies in building awareness and technical capacity within SMEs to access green financing. Without these foundational steps, many green opportunities, particularly in rural areas, will remain untapped. For SMEs to be a part of this green revolution, targeted training and capacity-building initiatives are essential,” Besigye continued.

The Central Bank of Uganda (BoU) is also exploring ways to drive green finance, including the drafting of a green finance curriculum and implementing policies aimed at discouraging investments in non-renewable energy sources such as charcoal burning.

The conference provided an opportunity for stakeholders to discuss these challenges and explore solutions to unlock the potential of SMEs in achieving green growth.