Farmers should be given low interest loans,says Kadaga

By Doreen Musingo

THE Speaker of Parliament Rebecca Kadaga has asked banking and microfinance institutions to give farmers access to agricultural loans with lower interest rates and a grace period for repayment.

Kadaga said many farmers had shunned services of banks and other microfinance institutions because of the high interest rates that they cannot afford to service. This, she noted had hampered the development of the agricultural sector.

Kadaga described as unfair a practice by most financial institutions to expect farmers to start paying back the loans they got before harvesting their produce.

“Two weeks after farmers have planted, money lending institutions start demanding for their loans even before the seeds have matured. These people must be given ample time and the funds should carry a low interest rate,” she said

Kadaga made the remarks while officiating at a promotion draw organized by Development Microfinance at Mbulamuti trading centre in Kamuli district on Saturday. 

The microfinance institution based in Kisozi Sub County, Kamuli district supports farmers by giving them loans to invest in agriculture to improve their welfare through increased household income.

Kadaga stressed the need by government to open up a farmer based banking institution saying this would save the farmers from choking on loans they cannot maintain.

“Some farmers have been left homeless after their homes are sold off by financial institutions in an attempt to recover their money,” she said.

Micheal Mawanda Maranga the managing director of Development Microfinance asked government to increase funding to the agriculture sector which he said provides livelihood to 80% of the country’s.

Mawanda, the Member of Parliament for Igara East in Bushenyi district said the issue was discussed during the recent retreat of NRM MPs at Kyankwanzi.

“We should lobby for friendly interest rates for farmers because the government benefits through taxes while the farmers become self reliant,” Mawanda said, adding that plans were underway to open more branches in the district to improve the welfare of rural farmers.

Zainab Wabomba the Kisozi branch manager said the 150 participants in the draw paid sh 100,000 which was held for a period of six months. She added that the branch has a total of 2,500 clients while other branches are in Seeta, Bushenyi, Kaliro and Mukono district. 

Several participants won prizes which included motorcycles, bicycles, water tanks, ox-ploughs, goats, cows, mobile phones, blackest, bed sheets, radios, television sets, saucepans sewing machines, mattresses, suit cases and recharged torches that were valued at a cost of sh20m.