Saturday, April 13, 2024
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Farmers Shy Away From Bank Loans Over High Interest Rates, Unfair Treatment

Farmers are running away from bank loans

Farmers in the Lango sub-region are shying away from bank loans over alleged unfair treatment and high-interest rates.

Several farmers who have now formed an association; Lira City Farmers’ Adoption Group argue that although many commercial banks are rallying them to go for loans to boost their commercial farming, the interest rates imposed on the loans makes it hard for them to pay back.

Geoffrey Obia, the chairperson of Lira City Farmers’ Adoption Group explains that bankers take advantage of ignorance amongst the farming communities and the absence of records to persuade them into taking money and eventually take much more from them.

Obia added that farmers who pick up the money are forced to sell off their products at a giveaway price in order to service the loans.

Paska Atim, a secondary school teacher who abandoned the classroom to venture into farming says she resorted to borrowing from Village Saving and Loan Associations after failing to secure a loan from the bank.

But Joseph Ebong, a mushroom farmer in Lira City believes that different banks have their own terms and conditions for the loans which the farmers must adhere to if they need the loans.

Ziegler Ojede Bobson, an area leader argued that aside from the high-interest rate, banks also take longer to process the loans which may interfere with the farmers’ intentions. He wants the Central Bank to consider regulating interest rates for bank loans given to farmers.

However, Stephen Luwaga, the manager of the Post Bank Lira Branch explains that the agricultural loans are given based on the farmers’ capacity, credit history and agricultural experience saying the bank would only be safeguarding public funds.

But according to Luwaga, farmers are still coming for loans especially during this planting season despite the complaints.


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