Why evolution of PDM into a bank is an economic imperative

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OPINION

By Dr Dick Nuwamanya Kamuganga

For decades, the Ugandan smallholder farmer has operated on the periphery, working hard yet often locked out of the formal financial systems that drive growth. Today, through the Parish Development Model (PDM), we are witnessing the first real attempt to structurally integrate the 39% of households previously in the subsistence sector into the local, national, regional agricultural value chains and global economy.

As we reflect on the future, it is critical to look beyond the immediate relief PDM provides and focus on the scientific and economic horizon outlined in the government’s "Tenfold Growth Strategy." The data tells us that sustainable growth is not achieved by scattered grants, but by the aggregation of capital.

The Science of Aggregation: The PDM Bank. The most transformative element of the current strategy is the planned "Transformation of the Parish Revolving Fund into a PDM Bank" by the year 2030. This vision, initiated by Uganda National Farmers Federation (UNFFE) Patron H.E. President Yoweri Museveni, is rooted in sound economic theory. Smallholder farmers, individually, present a high risk to commercial lenders. However, when organised into SACCOs at the parish level, and when those SACCOs are aggregated into a national financial institution, the risk profile changes dramatically.

This evolution is not merely desirable; it is necessary. The Tenfold Strategy targets a massive increase in national savings and the mobilisation of "patient capital" long-term finance at low interest rates (targeted at <5%). A PDM Bank, built on the disciplined savings of millions of farmers, becomes the engine that generates this capital internally, reducing our reliance on expensive external borrowing.

Integrating into Global Value Chains: Why does this matter to the average Ugandan? Because finance is the lubricant of value chains. To move a farmer from selling raw maize at the farm gate to exporting processed flour to the East African region, investment is required.

• Local: The PDM funds allow for the purchase of quality inputs (fertilisers, improved seeds) to close the productivity gap.
  
  
• Global: A PDM Bank can eventually finance the machinery for agro-industrialisation—the "Anchor Sector" aimed at generating $51 billion in value.

This is how a household in a remote parish becomes a shareholder in the global economy. It is a journey from subsistence to commercial integration.

The Risk of Policy Reversal. In this context, the farming fraternity views recent political proposals—specifically the stance by the National Unity Platform (NUP) presidential candidate to abolish the PDM, as scientifically and economically ill-conceived. From the perspective of the village, such an effort would not be a mere change in administration, but a tragic reversal of the gains in socio-economic transformation that are silently taking shape.

We are witnessing the slow but steady integration of smallholder households into the global economy; to dismantle the PDM infrastructure now would be to destroy the credit history and financial identity these families have painstakingly built. It would be akin to uprooting a crop just before harvest. While policy refinement is always welcome, the abolition of the PDM would sever the lifeline of financial inclusion, forcing millions back into the economic isolation from which they are finally emerging.

A Call to Action for January 15th. Therefore, the stakes for January 15, 2026, could not be higher. On behalf of Uganda National Farmers Federation, I call upon farmers across the country to massively turn up at the polling stations with a singular economic purpose. We must cast our votes for the preservation of the PDM and its evolution into the farmer-friendly bank we have long awaited. Farmers Vote for NRM-Vote for President M7.

A vote on the 15th is not just a political choice; it is a defense of our savings and our future. It is a mandate to protect the gains realized by villagers and to cement our integration into the global money economy. We must choose the path that keeps the bank doors open, rather than the one that shuts them in our faces.

A Reflection on Continuity Regardless of one’s political persuasion, the economic logic remains: you cannot build a skyscraper if you keep digging up the foundation. The gains we have realized, the capitalisation of village SACCOs, the financial literacy training, and the awakening of the commercial spirit are national assets.

As we look toward 2030, our collective focus must be on nurturing these parish-level institutions. We must ensure they are governed with transparency and efficiency so that they mature into the PDM Bank we have been promised. This is not just about protecting a government program; it is about protecting the future prosperity of the Ugandan farmer.

The writer is a village philosopher a president, Uganda National Farmers Federation (UNFFE)