Farmers have been asked to make use of the Agricultural Credit Facility (ACF) and the Small Business Recovery Fund to boost production and revenue from farming.
Fifteen years ago, the Government, in partnership with commercial banks, Uganda Development Bank Ltd. (UDBL), Micro Deposit Taking Institutions (MDIs), and Credit Institutions, introduced the Agricultural Credit Facility (ACF).
It provides medium and long-term financing to people engaged in agriculture and agro-processing, focusing mainly on commercialisation and value addition.
Loans under the ACF are disbursed to farmers and agro-processors through commercial banks, UDBLs, MDIs, and credit institutions at more favourable terms than are usually available under conventional loans.
“We support the entire value chain, all the way from the farm to production,” Dorothy Namarome, Bank of Uganda head of publicity and marketing ACF, says.
According to reports, the maximum loan amount to a single borrower is up to sh2.1b.
However, it can be increased up to sh.5b on a case-by-case basis for eligible projects that add significant value to the agriculture sector and the economy as a whole.
They include the acquisition of agricultural machinery, post-harvest handling equipment, storage facilities, agro-processing, mechanisation, and any other related agricultural and agro-processing machinery and equipment.
There is no designated minimum loan amount to the final beneficiary, who is the farmer or agro-processor; however, the Bank of Uganda can only reimburse a minimum of sh10m to the lending institutions.
Private sector businesses or individuals, partnerships, companies, and Savings and Credit Cooperative Societies (SACCOs, whether small, medium, or large in size) operating in Uganda and engaged in agriculture, agro-processing, and grain trade, among others, are all eligible to get the credit facility. 
Has the ACF worked?
Alex Tumwine is one of the beneficiaries. In 2021, he received sh150m that he invested in his cattle fattening business. He also included farm improvements such as farm clearing, planting of maize, and cattle purchase.
Tumwine started paying the loan back after six months at an interest rate of 12% per annum. “It is a friendly facility compared to other financing options from the conventional banking system,” he told the New Vision.
Tumwine encouraged all farmers to join the ACF in order to commercialise agricultural production.
“The ACF is stress-free,” he said. Similarly, Emmanuel Byaruhanga, from Hoima District, got ACF financing to the tune of sh56m. He owned land that he desired to open for commercial agriculture.
“I got a loan under the Bank of Uganda ACF programme which I had to pay back in three years at a low interest rate of 12% per annum. I have managed to open my land in Mubende district and expand my production into coffee and animal rearing. I got to know about the facility from an agricultural show,” he said.
According to the central bank, to access the credit, all eligible borrowers have to channel the applications through the participating financial institutions of their choice.
The loan amount is determined based on the assessment and appraisal of project costs and genuine credit needs in accordance with the lending policies of the respective participating financial institutions and is designated in Ugandan shillings.
This year’s expo, which began on February 14 and is ending, on February 16 was being sponsored by the Embassy of the Kingdom of the Netherlands in Uganda, Engineering Solutions Ltd. (Engsol), K-ROMA (Bella Wine), Tunga Nutrition, Uganda Development Corporation (UDC), Pepsi Cola, and aBi Development.
LEAD PHOTO CAPTION: Dorothy Namarome, Head Publicity marketing in Agriculture Credit Facility (ACF). (Credit: Mpalanyi Ssentongo)
