Post Bank Uganda (PBU), has received a Shs800 million grant from Agriculture Business Initiative (aBi) Group to boost its new agricultural loan product dubbed Rural Outreach project.
The project is a matching grant where 38 per cent is contributed by aBi Group and the remaining 68 per cent (Shs1.3 billion) will be contributed by PBU.
While receiving the grant early in the week, PBU managing director Stephen Mukweli said: “Our main target is to reach at least 50,000 agribusiness clients in five years. We have already achieved the target for the first year by reaching 9600 agribusiness clients.”
In an interview with the Daily Monitor, PBU’s Rural Outreach Project Manager Benon Rukundo said in April 2013, they embarked on the initiative as part of the preparation to start lending to agriculturalists so as to meet the rural clientele needs.
Lending to agricultural sector
He said: “We have completed reviewing our credit products, from which it was realised that we needed to lend to the agricultural sector as this forms a big proportion of our target market.”
Because of this, the bank has formulated the agricultural lending strategy, refined their agricultural credit product, unpacked it to create four products distinctive to serve the whole agriculture value chain from input trade, production, marketing, and to value addition/ processing.
In the one year the project has been running, 240 loans on average have been disbursed per month.
Mr Rukundo adds that on average they disburse Shs1 billion to agriculture which is a 10 percent of about Shs10 billion every month.