Equity Bank Uganda is in talks to provide commercial credit support to Zigoti Coffee Works Limited, a family-owned company seeking to increase coffee production and value addition. The discussions follow a visit to Zigoti's farm and processing facilities as a follow-up to the Trade and Investment Roadshow in Kampala. This potential partnership aims to enhance Zigoti's operations and help the company access new markets.
Established in 1984, Zigoti was Uganda's first coffee company to receive an export license after the coffee sector's liberalization. Chairman Charles Roscoe Nsubuga stated that the business is now focused on moving beyond bulk commercial trading to specialty coffee. The company is exploring ways to strengthen its relationship with smallholder farmers and improve its overall operations.
Nsubuga emphasized that access to finance will be crucial in supporting Zigoti's expansion plans. The company is seeking a comprehensive financing approach that includes supporting smallholder farmers with inputs to produce high-quality coffee. This approach would enable farmers to access financing of about Shs 1m to Shs 2m, with repayment linked to coffee sales proceeds.
Thomas Muto Lo'Buda, an Equity Bank delegate from South Sudan, noted that the engagement could open opportunities for Ugandan coffee in regional markets. Zigoti currently has buyers and markets in South Sudan, but much of the coffee trade moves through informal channels. The company sees potential for formal distribution and dealership arrangements, including roasting, packaging, and private-label coffee.
Nsubuga stressed the need for financial institutions to understand the coffee business and support local exporters. He believes that with stable financing, the company can create better returns for farmers and contribute more to the economy. Equity Bank's engagement with Zigoti is part of its efforts to support businesses through commercial credit and extend financing and financial literacy across agricultural value chains.
Bringing financial institutions to the farm is essential in helping them understand the realities of agricultural production, according to Nsubuga. This approach enables lenders to develop targeted financial solutions that address the unique needs of agricultural businesses. By supporting Zigoti's expansion, Equity Bank aims to promote sustainable agricultural practices and contribute to Uganda's economic growth.
The proposed partnership between Equity Bank and Zigoti Coffee Works has the potential to benefit smallholder farmers, promote value addition, and increase Uganda's coffee exports. With a comprehensive financing approach, Zigoti can strengthen its operations and explore new markets, ultimately contributing to the country's economic development.
Key points
- Equity Bank Uganda considers expanded credit support for Zigoti Coffee Works to boost production and access new markets.
- The proposed financing approach would enable smallholder farmers to access Shs 1m to Shs 2m for inputs, with repayment linked to coffee sales proceeds.
- The partnership aims to promote sustainable agricultural practices, value addition, and increase Uganda's coffee exports.
