By Lucky Patrick
Farmers in the Rwenzori Region have been advised to plan ahead of time if they are to benefit from the agriculture credit facility fund instituted by the Government through Bank of Uganda.
The fund, was instituted to help farmers stimulate the agribusiness sector through production, value addition among other avenues.
While meeting stakeholders in the agricultural value chain in Fort portal city, Jimmy Ocen the manager “agriculture lending officer” at post bank observed that most farmers tend to apply for the agricultural credit facility loans when the season is already on.
Accessibility of the loan
He explains that even though the loan is later on processed and approved, delays might sometimes lead to late planting or application of fertilizers which negatively impact on the farmer on either produce or market.
Ocen, notes that many farmers are struggling to recover agricultural credit facility loans because a big number of them divert funds into other activities. These include school fees, business enterprises and luxury and by the time they think about applying the funds for the intended purpose it’s already little for anything hence struggling to recover.
Ocen adds that Agriculture credit facility fund is also affected by low uptake from the intended category, this he attributed it to lack of enough information flow by the public hence the need to create awareness to enable Agriculturalists benefit.
Paul Drake Kasande, the head of private sector in Fort portal city, says the agricultural credit facility fund would help in further improving on the agribusiness enterprise productivity in the country.
He however notes the bureaucracy and high interest rates that surround it making it hard for the public to utilize the opportunity.
Kasande, says most Ugandans are small scale entrepreneurs and thus notes the need to establish a fund with friendly terms. This according to him, will accommodate people with small business apart from the medium enterprise only to address the matter of inclusiveness.
He also wants the public to interest itself in financial management knowledge, cost income analysis to avoid inconveniences with banks if they are to grow their business
What farmers say
March Kasaija, a farmer and entrepreneur in Kabarole district, called for reduction of the interest rates on agricultural loans to enable farmers recover the accessed loans on time.
He has also advised farmers to acquire full knowledge about a particular farming enterprise before venturing into it.
As a risk mitigation factor, Kasaija advises fellow farmers to embrace modern farming practices by using mechanization and improved seed varieties.
About ACF
According to Bank Of Uganda, The Agricultural Credit Facility (ACF) was set up by the Government of Uganda (GoU) in partnership with Commercial Banks, Uganda Development Bank Ltd (UDBL), Micro Deposit Taking Institutions (MDIs) and Credit Institutions all referred to as Participating Financial Institutions (PFIs).
The Scheme’s operations started in October 2009, with the aim of facilitating the provision of medium and long term financing to projects engaged in Agriculture and Agro-processing, focusing mainly on commercialization and value addition.
Loans
Loans under the ACF are disbursed to farmers and agro-processors through the PFIs at more favorable terms than are usually available under conventional loans.
The scheme is administered by the Bank of Uganda (BoU) and its operations are guided by the Memorandum of Understanding (MoU) signed by all the stakeholders.
The GOU, is represented by the Ministry of Finance, Planning and Economic Development (MFPED). The scheme operates on a refinance basis in that the PFIs disburse all the loan amount required by a client and seek for a re-imbursement from BOU.
