More Ugandan farmers tap into BoU’s Shs1 trillion agribusiness loan facility

Across Uganda, farmers are leveraging a massive Shs1 trillion loan fund to modernize their operations and drive agricultural growth. For the past 15 years, the Agricultural Credit Facility (ACF), a government-backed initiative managed by the Bank of Uganda, has been channeling vital capital into the hands of those who till the land.

This program, established in 2009, aims to commercialize agriculture by providing affordable medium and long-term loans. From purchasing essential machinery and post-harvest equipment to investing in livestock and agro-processing facilities, farmers are using these funds to expand and diversify their businesses.

“The Agricultural Credit Facility has already channeled over one trillion shillings to more than 6,000 beneficiaries nationwide as of December 2024,” announced Bank of Uganda Governor Dr. Michael Atingi-Ego at a recent town hall meeting in Tororo. “In the Eastern region alone, 400 projects have received Shs242 billion.”

In Tororo, Dr. Atingi-Ego highlighted how local farmers are utilizing loans ranging from Shs1 million to Shs20 million, depending on their specific needs. “These clients represent local farmers investing in rice production, crop farming, and agro-product businesses,” he explained. “These are your community members transforming their agricultural dreams into reality.”

The ACF’s impact is far-reaching. Farmers are investing in everything from pesticides and fertilizers to banana suckers, chicks, and cattle. The program also supports agro-processing facilities and even covers working capital, allowing farmers to pay for labor, utilities, and specialized machinery.

A crucial aspect of the ACF’s success is its accessibility. The “block allocation arrangement” allows smallholder farmers and micro-borrowers to access credit without traditional collateral. Instead, lenders focus on the borrower’s character, cash flow, and movable property, making financing more inclusive.

This injection of capital is not just about individual farmers; it’s about transforming entire rural economies. By providing the financial tools necessary for modernization and expansion, the ACF is empowering farmers to increase productivity, improve livelihoods, and contribute to Uganda’s overall economic growth.