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Agriculture gets sh2b boost to fight barriers

By Vision Reporter

Added 4th June 2014

A new agriculture funding line that is expected to boost efforts towards agricultural commercialisation by removing farm barriers has opened.

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By David Mugabe and Juliet Waiswa

A new agriculture funding line that is expected to boost efforts towards agricultural commercialisation by removing farm barriers has opened.


The sh2.12b funding will be administered by Post Bank but with a percentage coming from the agricultural business initiative (aBi) Trust, the agency implementing the Uganda Rural Challenge Fund funded by KFW, a German agency.

Post Bank will contribute 62% (sh1.3b), while aBi will contribute sh813m (38%). During the signing of the contract at the aBi offices in Kampala, Post Bank chief Stephen Mukweli said they will address barriers such as adapting appropriate technology and addressing the shortfalls of the value chain.

They will acquire and deploy two vans to reach rural farmers.

“The onus is on us to make sure we use the money well to serve its intended purpose,” said Mukweli.

Peter Ochiengs, the aBi Trust acting chief, explained that the funding will help address the challenges of rural financing.

“Our bankers still don’t appreciate farmers. They think they are risky. In the long run, if the loan officer can appreciate, then they are making the work of the farmer easy,” said Ochiengs.

The money will not be accessed directly as loan cash, according to the two institutions. It will go towards procurement of equipment for project implementation, marketing of agricultural loan products, recruitment and training of loan officers.

The rural fund provides grants with a minimum of euro50,000 and maximum euro250,000 to financial institutions to promote access to financial services.

The financial institution must have a minimum of 3,000 clients and outstanding loan portfolio of at least sh1b. It will also be deployed towards hiring an agricultural expert to work with the bank for about one year, upgrading the technology to be able to provide specific reports on the agricultural loans and remodeling to create space for loans officers.

Mukweli said the bank will contribute to serve the mass market and empower Ugandans by providing efficient and reliable financial services.

“This contract is to deepen our financials collaboration centred around agriculture which employs most Ugan - dans. The bank is designed to support small and big farmers,” Mukweli said.

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