Successful deployment of green finance in the SME banking sector rests on several success factors: knowledgeable and motivated employees, identification of a pipeline of green SMEs that can be served by the bank, and the development of targeted financial products and instruments that respond to the needs of these clients. With these factors in place, banks are able to seize opportunities in the green finance market and to access global green and climate finance flows.
From the 21-23 February, 2024, adelphi research gGmbH facilitated a Green Finance Academy training to dfcu, a partner bank of the Uganda Green Enterprise Finance Accelerator project. The Green Finance Academy brought together dfcu colleagues from multiple departments – including product development, risk, credit approval, ESG, and from branches – to jointly assess opportunities for the bank in green finance and to develop pathways forward to access these opportunities.
The training first looked at risks and opportunities related to climate change, and at identifying green clients, with visits from three UGEFA-supported enterprises. Divine Bamboo, Reform Africa and Ecoplastile shared their financing journeys and challenges, and spoke about their business models in the green economy and plans for growth. Based on these inputs, participants identified existing green clients in their portfolio and looked at how to increase this share of their portfolio.
The next sessions focused on the development of financial products designed for the needs of such green clients, aligned to focus sectors of the bank. The financial products looked to bring in innovative financial mechanisms and favourable conditions for the clients.
A highlight of the training was the presence of Charles Mudiwa, Managing Director of dfcu, and Cristina Banuta, Programme Manager for Access to Finance, Agri-business and Land at the Delegation of the European Union to Uganda, both of whom underlined the importance of financing green initiatives in the SME sector, and the opportunities present for the banking sector in engaging in the green transition.
The outcomes of the training respond directly to this message: four product prototypes were developed for SME clients in the green sector, and a clear roadmap was set out for continued engagement of the employees in this topic. At UGEFA, we are glad to join forces with dfcu to increase access to finance for green SMEs – or as put in the words of dfcu: fired up, ready to go!
If you’re interested in further details on the Green Finance Academy, please contact info@ugefa.eu
