Modernizing agriculture requires cheaper loans
Uganda is considering setting up an agricultural bank to enable farmers easily access cheaper credit, President Yoweri Museveni has said.
He blasted commercial banks for failing farmers on access to credit, saying that they are only interested in funding traders to import.
The President made the revelation today while presiding over the 58th Independence Day celebrations at State House Entebbe.
Museveni said that the main hindering factors to the pace of Uganda’s prosperity include the high cost of capital, which are the high interest rates for our traders- the high interest rates by the commercial banks.
“To address this, Government has increased capitalization of UDB with Shs1.1Trn this financial year. We are also thinking of setting up an agricultural bank because these commercial banks are really commercial banks like their name says,” Museveni said, adding: “They are there to fund traders who go China to import takataka (trash) sell it quickly and make money.”
He noted that commercial banks aren’t here to give loans to agriculture and industry where the gestation period of the project is a long one, noting, “UDB is there, we refused to privatize it, but we want a specialized agriculture bank owned by farmers operating on principles of giving cheaper loans.” However, the plans to set up an agricultural loan are not entirely new. Government has often talked about establishing a bank for farmers but no steps have been taken to actualize the plan.
Gen. Charles Angina, Deputy Coordinator at Operation Wealth Creation used the occasion to unveil a new book “Musevenomics” where detailed all President Museveni’s ideologies towards alleviating Ugandans out of poverty through agriculture.