Equity Bank backs Zigoti Coffee expansion

Equity Bank Uganda is exploring expanded commercial credit support for Zigoti Coffee Works Limited as the family-owned company seeks to increase coffee production, value addition and access to new markets.

These discussions follow the bank’s visit to Zigoti’s farm and processing facilities, last Tuesday as a follow-up to the Trade and Investment Roadshow held at Marriot Hotel in Kampala. 

Established in 1984, Zigoti became Uganda’s first coffee company to receive an export license following the liberalization of the coffee sector.

Charles Roscoe Nsubuga, chairman of Zigoti Coffee Works, said the business was now focused on moving beyond bulk commercial trading and specialty coffee.

“If you cut our blood, the DNA is coffee. This is a third-generation coffee business. Our grandparents started with coffee, our parents continued, and now we are taking it to another level.”

Nsubuga said access to finance would be important in supporting the company’s expansion and strengthening its relationship with smallholder farmers.

“We are looking beyond one-off asset financing. We want to see how the wider value chain can be financed, including farmers who need inputs to produce quality coffee,” he said.

Under the proposed approach, farmers could access financing of about Shs 1m to Shs 2m for inputs, with repayment linked to proceeds from coffee sales.

Thomas Muto Lo’Buda, Equity bank’s delegate from South Sudan, said the engagement could also open opportunities for Ugandan coffee in regional markets.

Zigoti has buyers and markets in South Sudan, although much of the coffee trade currently moves by road through informal channels. The company said there was potential to develop formal distribution and dealership arrangements, including roasting, packaging and private-label coffee.

Nsubuga said: “We need financial institutions to understand the coffee business and support local exporters. If we can stabilise the business, we can create better returns for farmers and contribute more to the economy.” 

For Equity bank, the engagement forms part of efforts to support businesses through commercial credit, while extending financing and financial literacy across agricultural value chains.

Nsubuga said bringing financial institutions to the farm was important in helping them understand the realities of agricultural production.

The post Equity Bank backs Zigoti Coffee expansion appeared first on The Observer Media Ltd.