the operations of the supervised financial instructions by raising awareness among these institutions, establishing a robust climate risk policy, and pursuing and promoting sustainability certification. together, we aim to innovate and devise new strategies to uplift marginalised communities, bolster industries, and establish policies that prioritise value creation, particularly for those at the economic base. the bou is dedicated to mitigating risks linked with development financing, advocating for environmental sustainability, and cultivating inclusive growth. we contribute to this agenda by administrating initiatives like the agricultural credit facility ( acf ) and the small business recovery fund ( sbrf ), aimed at bolstering agricultural value addition and aiding pandemic - affected small businesses. launched in 2009, the acf aims to promote value addition in the agricultural sector by providing affordable medium - and long - term loans. the acf has achieved significant success, with cumulative disbursements reaching ugx 860 billion by 31 december 2023. western uganda is the second largest beneficiary of acf loans, taking a share of 23 %, following the central region, which takes 54 %. notably, 62 % of these loans were granted to micro and small farmers under the block allocation arrangement, demonstrating the acf's potential to enhance financial inclusion. the block allocation arrangement under the acf caters to smaller players, accepting alternative forms of collateral such as movable property, inventories, and even credit history. despite its achievements, the acf faces challenges that limit its full potential. these include limited financial literacy, inadequate sensitisation of credit officers and beneficiaries, and insufficient public awareness of the facility. to address these challenges, the bou reviews the acf's operations and implements strategies to improve uptake. these include engaging with pfis to revise their lending policies, ensuring wider access to acf financing, and enhancing public communication about the facility. established in 2021, the sbrf targets small businesses affected by the covid - 19 pandemic. similar to the acf, the sbrf provides loans through supervised financial institutions. as of 30 december 2023, the sbrf had disbursed ugx 18. 4 billion to 1, 500 smes. the sbrf's uptake has increased due to amendments to the memorandum of agreement ( moa ) and continuous bou engagement with stakeholders. the western region is the second largest beneficiary of the sb

the capital markets authority, to safeguard the interests of savers and other users of the financial system. while we recognize that financial markets are characterized by market failures, it is often very difficult, in practice, for governments to correct these failures and efforts to do so are often counterproductive. an important component of the financial system is the capital market, which entails funds being mobilized by firms, institutions or the government directly from savers through the issuance of equities or bonds. although market based financial systems are sometimes contrasted with bank based systems, this is in some respects a false dichotomy. the capital market is not a substitute for the banking sector. instead capital markets and the banking sector are complements ; each catering for different needs of the economy in terms of financial services. in particular, efficient capital markets are much better suited than commercial banks to provide long term finance to the corporate and public sectors. the capital market is also better placed to accommodate the needs of investors – both institutional and personal – who require long term assets and have a higher appetite for risk than is typical among depositors in commercial banks. as the business sector of our economy develops and as a larger share of the population are able to participate in institutional vehicles for savings, such as pension schemes, the demand for capital market instruments will grow. in this regard, i would like to note that one of the most important reforms for stimulating capital market development in this country is the genuine liberalization of the pensions sector, so that all pension providers licensed by the uganda retirement benefit authority can compete on a level playing field to manage both mandatory and voluntary pension contributions. we have been discussing pension reform for the last 20 years. we have put in place the appropriate regulatory structure. now is the time to liberalize the sector and open it up to competition. monopoly is never conducive to the vibrant growth of a market. to conclude, i would like to commend the capital market authority for their efforts to spearhead the preparation of the master plan for the capital market. the bank of uganda is proud to have contributed to these efforts and we will continue to play a role in supporting capital markets development in our country. thank you for listening.