dfcu Bank has reaffirmed its commitment to transforming Uganda’s financial landscape through green finance, positioning itself as a key player in driving sustainable growth among small and medium enterprises (SMEs).
Speaking at the Uganda Green Enterprise Finance Accelerator (UGEFA) Green Finance Dialogue 2025 held at Mestil Hotel in Kampala on Thursday, Ms Diana Nanono Ssengendo, the Bank’s Sustainability Manager, outlined the bank’s progress in integrating climate risk into its lending and operational processes, while scaling up climate-smart financing initiatives for agribusinesses and manufacturing enterprises.
“Integrating climate risk into our bank processes is already happening,” Ms Ssengendo revealed. “We have incorporated it into our risk management system and established a team of ESG credit analysts who conduct environmental and social risk assessments for all potential borrowers.”
According to Ms. Ssengendo, this framework allows dfcu to categorize borrowers into high, medium, and low environmental risk tiers, helping the bank develop tailored support plans, especially for high-risk clients, to close sustainability gaps.
“If we identify a client as high risk, we don’t just deny financing,” she explained. “We work with them to develop a corrective plan, monitor progress, and support their transition toward more sustainable practices.”
To effectively implement these strategies, dfcu Bank has prioritized capacity building for its internal teams and clients. Through a strategic partnership with UGEFA’s Climate Green Finance Academy, the bank is training its credit officers, relationship managers, and sustainability champions to engage SMEs on green financing opportunities.
“Knowledge is two-way,” Ms Ssengendo emphasised. “Our staff must understand green finance deeply so they can empower customers to take informed, sustainable actions. That’s why we are investing heavily in training and partnerships.”
dfcu Bank is also extending this knowledge to clients through the dfcu Foundation, particularly under its flagship program FEAT (Financial Expansion for Agribusiness Transformation and Sustainability). The initiative focuses on empowering agribusinesses with climate-smart agriculture solutions, technical assistance, and market linkages.
The bank targets to scale up its support to over 100,000 agri-SMEs by 2029, a goal Ms. Ssengendo described as “ambitious but achievable through consistent partnerships and innovation.”
Through its ongoing collaboration with UGEFA, now in Phase II, dfcu is developing a “green pipeline” of SMEs that are not only creditworthy but environmentally responsible.
“We are walking a journey with SMEs supporting them from startup to bankability,” she noted. “Our goal is to ensure that Uganda’s next generation of entrepreneurs grows sustainably, contributing to the country’s climate resilience and economic development.”
The bank’s approach goes beyond financing. It includes helping SMEs embed environmental, social, and governance (ESG) principles in their operations factors increasingly vital in global trade and investment.
Ms. Ssengendo further noted that dfcu’s green finance strategy aligns with Uganda’s Nationally Determined Contributions (NDCs) under the Paris Agreement, emphasizing the bank’s role in reducing carbon emissions and promoting sustainable business models across the country.
“Green finance is no longer a buzzword,” she said. “It is a practical and essential tool for achieving national and global climate goals. Our contribution as a bank is to enable businesses to access financing for renewable energy, waste management, sustainable agriculture, and eco-friendly production.”
She added that dfcu envisions a near future where more banks introduce customised green financial products, more SMEs adopt eco-conscious practices, and real-time data reporting becomes standard in tracking the impact of climate finance.
Meanwhile, she called on Uganda’s entrepreneurs to be proactive and strategic in aligning their businesses with sustainability principles. “SMEs should not wait for green finance to find them,” she urged. “Develop a solid, environmentally conscious business case and approach banks like dfcu that are already offering climate-aligned solutions.”
Dr Colin Agabalinda, an inclusive rural and Climate Finance specialist, praised financial institutions like dfcu bank for bridging the gap between the people, the beneficiaries that need this money to help them deal with the effects of climate change, and they make this bridge work.
“How does the money leave these funds where it is for financial institutions, up to its institutions actually serve as the bridge, because financial institutions, especially at the local level, they’re the ones who understand the challenges, they understand the seasons, they understand the crops or the animals, they understand the networks within the communities, the people who can Pay back put us in faith. So unless financial institutions come in, this money remains up there,” he said.
He added that what holds this bridge together are things like what UGEFA is doing, such as releasing instruments with no guarantees, concessional credit lines, or even capacity building. “Because the financial institutions themselves need capacity to develop products, capacity to understand these risks and understand the needs of the communities they serve, and then also simple monitoring tools to be able to know and report on what they are doing.”
As Uganda continues to battle climate change impacts from erratic rainfall to soil degradation, green finance is emerging as a lifeline for SMEs, especially those in agriculture and manufacturing. dfcu’s model blending capacity building, credit innovation, and climate integration positions it as a trailblazer in the country’s sustainable finance ecosystem.
By embedding climate risk management into its lending operations and empowering SMEs with the tools to thrive sustainably, dfcu Bank is not only greening finance but also financing the future of a resilient Uganda.
UGEFA and dfcu Bank are running the second phase of their strategic partnership, reaffirming their shared commitment to driving Uganda’s transition towards a sustainable, green economy.
Building on the success of the initial collaboration, this renewed partnership will further scale access to tailored financing for small- and medium-sized enterprises (SMEs) operating in key green sectors, including clean energy, green manufacturing, sustainable tourism, waste management, and green mobility.
UGEFA and dfcu Bank are dedicated to supporting innovative enterprises that are creating positive environmental and social impacts across Uganda.
It is a significant milestone as UGEFA, supported by the European Union and implemented by adelphi global gGmbH, and dfcu Bank continue to foster a thriving ecosystem for green business growth.
dfcu Bank has always been dedicated to fostering responsible business growth in Uganda. This partnership is a testament to their purpose of Transforming Lives and Businesses in Uganda and to their commitment to a more sustainable future.
By working with UGEFA, dfcu is opening new doors for green enterprises to access the finance and support they need to grow responsibly, aimed at empowering more businesses to achieve their ambitions while contributing to Uganda’s green transition and ensuring sustainable growth for generations to come.
