Uganda Launches Sh40b Islamic Fund to Empower Small Businesses

Small businesses in Uganda, particularly those owned by women, youth, and persons with disabilities, are poised to benefit from a new $10 million (approximately Sh40 billion) Islamic revolving fund launched in the country. The initiative, known as the Revolving Economic Empowerment Fund (REEF), aims to strengthen Islamic financing and expand access to affordable loans for micro-enterprises, especially among vulnerable communities.

Catalytic Financing for Sustainable Growth

Launched by Hijaz Community SACCO (Savings and Credit Cooperative Organisation), REEF seeks to mobilise resources from development partners, businesses, and individuals to support micro-enterprises and promote economic empowerment. The fund was unveiled at an event held at the Uganda Business Facilitation Centre on November 5.

Elias Kigonya Muwalima, the Board Chairman of Hijaz SACCO, described the fund as a catalytic financing initiative designed to support Islamic SACCOs and strengthen their sustainability. "Our goal is to ensure that we put in place a fund that is ethical, affordable, sustainable and can help to transform lives of vulnerable communities, especially women, youth, persons with disabilities by supporting their micro enterprises," he said.

The REEF initiative is expected to provide a much-needed boost to small businesses that often struggle to access conventional financing due to high interest rates and collateral requirements. By offering Islamic financing, which prohibits interest, the fund aims to promote financial inclusion and equitable economic growth.

Stakeholders believe that empowering micro-enterprises will have a ripple effect, creating jobs and improving livelihoods. The fund's focus on women, youth, and persons with disabilities aligns with broader efforts to reduce inequality and foster sustainable development in Uganda.

With the launch of REEF, Hijaz SACCO and its partners are setting a precedent for ethical finance in the region, demonstrating how faith-based principles can be harnessed to drive social and economic progress.