Yesterday (December 13, 2016), the United Nations Capital Development Fund (UNCDF) celebrated its 50th anniversary.
UNCDF is the UN’s capital investment agency for the world’s 48 least developed countries. With its capital mandate and instruments, UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development.
UNCDF delivers last mile solutions through five thematic windows: green economy, food security and nutrition, economic empowerment of women and youth, financial inclusion and innovation, infrastructure and services.
UNCDF works closely with governments, and funding and implementing partners to make finance work for the poor, which is a very critical service in transforming Uganda to the middle-income status and achieving the Sustainable Development Goals (SDGs).
UNCDF has been working actively in Uganda since 1985, concentrating initially on providing technical support and grant financing/investments for various government programmes through activities in infrastructure development, rehabilitation and maintenance. A change was made in 1997 and 2001 when UNCDF support was extended to Uganda’s decentralization.
The following decade saw three consecutive District Development Programmes implemented in support of various aspects of decentralization. However, there was nothing static about the approach, which has evolved to reflect more advanced stages of decentralization.
The strategy used has progressed from project-driven infrastructure delivery (for DDP I) to institutional development and policy impact as well as local development model (for DDP II) to local economic development support (for DDP III).
At the same time, UNCDF introduced its financial inclusion portfolio in Uganda, starting with Microlead and YouthStart, two flagship programmes that endeavoured to improve access to microfinance, particularly savings services, to underserved populations and young people.
Today, UNCDF is implementing a number of third-generation programmes in Uganda in financial inclusion and local development finance.
These programmes are aiming to scale up sustainable branchless and mobile financial services that reach the poor (Mobile Money for the Poor, MM4P); develop replicable business models for scaling up microfinance for cleaner and more efficient forms of energy (CleanStart); unlock national financial markets for investments in local infrastructure for sustainable and inclusive local development – Local Finance Initiative.
“What I am most proud of is that we have improved the livelihood of our farmers. We have realized that milk is currency for our farmers and can be used as collateral against inputs, personal loans, etc. As such, they are able to get good housing, food and medical care,” said Jackson Katongole, the chairperson of the Abesigana Kashaari Dairy Farmers Cooperative Society, which is working with LFI on a new dairy processing facility worth $18.6 million and owned by the farmers.
UNCDF’s programs have helped tens of thousands of Ugandans to get access to financial services (with YouthStart alone benefitting 54,700 youths, of which 42 per cent were young women and girls); contributed to better local infrastructure and services.
With a programmatic portfolio in Uganda of over $10 million and growing, UNCDF is confidently looking into the future, planning to double its portfolio in the next two years.
A few more exciting programmes are in the pipeline to support digitalization of public and private financial flows on a national scale; to leverage existing work around digital finance to empower life of millions of Ugandans by supporting digital innovation in the energy, agriculture, education, transport and water sectors; scale up saving services for the poor and access to finance for young people, particularly women; improve access to finance for urban infrastructure development; help reduce vulnerability of local communities to the adverse effects through climate-smart finance; and promote investments in infrastructure and local private sector initiatives that have a transformative local impact on women’s economic empowerment.
Today, fifty years after its establishment, UNCDF is more relevant than ever; with its capital mandate and instruments, UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, in support of households, localities and small enterprises that are underserved, where development needs are greatest and where resources are most scarce. UNCDF’s proud story is that of making a big difference in the lives of the poor.
The author is the UN resident coordinator and UNDP resident representative.
