Deputy Governor Michael Atingi-Ego addressing media in Kasese. He wants farmers to utilize the ACF
The Bank of Uganda Deputy Governor, Michael Atingi-Ego has tasked commercial banks and other financial institutions to sensitize farmers about the availability of the Agricultural Credit Facility (ACF) to enable them access favorable loans.
He also wants commercial institutions to prioritize support for green jobs that are meant to mitigate the effects of climate change.
The government set up ACF through the Bank of Uganda 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 facility was launched in 2009 to unlock the challenge of farmers accessing affordable credit.
The main objective was supporting the commercialization and modernization of the agricultural sector, which according to the government was constrained by several factors like inadequate infrastructure, volatility of weather patterns, and access to finance.
Eligible projects include support for the acquisition of agricultural machinery, post-harvest handling equipment, storage facilities, agro-processing, mechanization, and any other related agricultural and agro-processing machinery and equipment.
According to Atingi-Ego, given the importance of agriculture towards the economic development of the country, farmers need to be given all the necessary information and convenient financial products to boost social-economic transformation.
He notes that the facility if well presented to low-income households will go a long way to help them put their knowledge into real production.
The Deputy Governor also notes that BoU is supporting the institutionalization of environmental and social governance sustainability where financial institutions will begin creating value for society through extending financial services meant to create clean jobs and enhance economic growth.
He notes that climate change affects the mandate of creditability and disasters such as floods and drought eventually lead to inflation and expose commercial banks to the risk of losing their collateral.
Winnie Mulisa from BoU notes that ACF also considers block allocation to help farmers without collateral to get up to Shillings 20 million credit without asking for the traditional collateral requirements while using the credit history of a client.
However, she says that the fund has been affected by low uptake from the intended category, which she attributed to a lack of sufficient information.
Rodgers Baguma, a farmer from Muhokya says there has been a need to establish a fund with friendly terms to accommodate people like him with small businesses to address the matter of inclusiveness.
-URN
