Bureaucracy hampers Agriculture Credit Facility

Nassali Fatiah

Nassali Fatiah

, Business

Despite efforts by the government to avail cheaper agricultural credit through the Agricultural Credit Facility (ACF), a few farmers have taken advantage of the facility to boost productivity due to bureaucracy.

According to David Kalyango the executive director finance in Bank of Uganda, out of the 538 farmers that applied for the credit facility in 2017 only 416 were eligible with the rest lacking the necessary requirements needed by the financial institutions.

In 2009 government set up an Agricultural Credit Facility (ACF) partnership with the regulated financial sector with the aim of providing credit with low interest rates at 12% to farmers.

But the reports from Bank of Uganda indicate that most farmers till today have failed to make use of the facility.

“Some of these farmers don’t even know how to draw a business plan, they don’t do record keeping on farm and this makes its hard to convince banks to offer them credit,” Kalyango said.

Kalyango added that although the low uptake has been blamed on limited sensitisation and restrictive conditions for accessing the funds, farmers also lack good documentation about their businesses.

“Government has failed to publicise the facility to enable farmers understand the requirements and the necessary procedures,” he said.
As at December 31 2017, the total disbursements to the ACF had amounted to Shs 261 billion extended to the 416
eligible farmers across the country with government’s contribution amounting to Shs 131 billion.


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