economy 3 October 2026 Daily Monitor (Uganda)
Rural Farmers Barred from Shs1.5 Trillion Agricultural Fund
Despite over Shs1.5 trillion disbursed since 2009, rural Ugandan farmers are struggling to access the Agricultural Credit Facility (ACF) due to issues like lack of collateral and poor financial record-keeping. Source: https://www.monitor.co.ug/uganda/news/national/rural-farmers-struggle-to-access-shs1-5-trillion-agricultural-credit-fund-5618876
The Agricultural Credit Facility (ACF), established to boost the agricultural sector with affordable, long-term financing, has seen over Shs1.5 trillion disbursed since its inception in 2009. However, many farmers in rural areas continue to face significant hurdles in accessing these funds.
Bank of Uganda (BoU) officials revealed that while 15,300 out of 23,000 applications had been approved and disbursed by June 30, the financing remains concentrated in urban commercial centers. This leaves farmers in remote regions largely unaware of the facility or unable to meet its requirements.
Local government officials highlighted that a lack of awareness and understanding of application processes are key issues. Districts surrounding Kampala, such as Wakiso, have received a disproportionately large share of the funds compared to more rural districts like Nakasongola. This geographical disparity underscores the challenge of equitable distribution.
Officials attribute this concentration partly to the greater presence of financial institutions and commercial activity in urban areas. While the ACF is channeled through existing commercial banks, rural farmers encounter additional barriers. These include the inability to provide adequate collateral and a general lack of formal financial records.
BoU also cited weather-related risks, pest infestations, market volatility, and fluctuating commodity prices as factors that complicate agricultural lending. Despite provisions for smaller loans and alternative collateral assessments, encouraging farmers to maintain proper financial records is crucial for banks to assess business viability.
As the government continues to inject funds into the scheme, renewed calls are being made for improved financial inclusion and targeted information dissemination in rural areas. This is essential to ensure that the benefits of the ACF reach the intended beneficiaries across the country, not just those in major commercial hubs.