Farmers get Shs8b boost
Netherlands Ambassador Alphons Hennekens (C) with Financial Access Manager Marketing and Communications Ms Elizabeth Okunda (L) and one of the Kampala Business Man Tom Mugenga during the official launch of Finance for Agriculture project in Kampala on Friday . Ambassador Alphons said the funds for Agriculture project will help to boost farmers . PHOTO BY JOSEPH KIGGUNDU
What you need to know:
The gross domestic product (GDP) for agriculture in sub Saharan Africa is 34% which employs 60% labour force
KAMPALA
A new model to stimulate the financing of the food and agriculture sector through financial institutions in Uganda has been launched.
The programme launched by Financial Access (East Africa), Netherlands Embassy and SNV draws experiences from the ongoing Finance for Agriculture Kenya programme.
While making a presentation during the launch, the Netherlands Ambassador to Uganda Alphons Hennekens said his government has given over $3million (about shs8.1billion) to the project to boost agriculture for local farmers who face challenges in accessing funds for farming.
“We have invested that much in this programme and it will work both on the supply and demand sides, offering technical assistance, new technologies in financial infrastructure and risk management, and setting up multi-stakeholder initiatives which enable a catalytic change in the agricultural finance landscape in Uganda,” said Mr Hennekens.
Maarten Susan the director of Financial Access said the program will assist Banks, MFIs and SACCOs to build world-class agri-finance business units; whilst at the same time work with farmer organizations and Agri-SMEs to help them graduate into bankable commercial ventures.
Finance for Agriculture (F4A) has been set up as a Public Private Partnership between Financial Access, SNV and the Embassy of the Kingdom of the Netherlands in Uganda.
The programme comprises of 3 pillars to be executed over the coming 3 years.
The Head of Agriculture and credit facilitation at Bank of Uganda Ms Rosette Bamwine said BOU welcomes the program aimed at boosting agriculture.
She said the maximum loan amount given to a single borrower is shs2.1billion and can go up to shs5billion.
She said the maximum period for paying back is eight years and a minimum of six months at an interest rate of 12%.
The gross domestic product (GDP) for agriculture in sub Saharan Africa is 34% which employs 60% labour force. However, Uganda’s GDP is at 23% with 48% export earnings and an 82% labour force.
