Farmers reap big from Stanbic Bank financing

Lira District is booming with trade. The district in the northern Uganda region which is recovering from many years of insurgency inflicted upon it by the LRA war, is fast becoming a centre of commodities exchange with all major cash crops being grown and supplied in the region.

Cash crops
On a normal day, Lira Town is a bee hive of activity with trucks either offloading or being loaded with bags of cash crops such as cotton, sunflower destined for different factories across the country.

Many players in the agricultural value chain in this region are middlemen who buy from the farmers at the village level and sell to big volume buyers who then supply the large companies such as Mukwano Industries or MMP AgroWays who buy large volumes of the different cash crops.

Many farmers who have been able to expand in the last 10 years attest to using financial service vehicles to either scale up or help them honour their contractual obligations as suppliers.

One such person is Bosco Erach, the proprietor of Pite Yela Enterprises who is one of the largest supplies of grain, sesame and cotton to different factories.
Erach, who has more than 100 agents across six districts, says he constantly needs cash flows to be able to deploy the agents to buy the produce from the farmers at the village level and transport the crops to his central warehouse based in Lira Town.

“As a grain dealer selling a variety of grain and other cash crops to companies like Mukwano and MMP Agro Industries, I work with agents who constantly need money to be able to buy the produce and maintain our stock levels. This usually requires a lot of money especially in the peak seasons when the crops are being harvested,” he says.

Loans
He adds, “I approached Stanbic Bank for financing since I already had a personal account with them. They accepted to give me a loan of Shs100m which enabled me to buy the produce and pay farmers to allow me to supply and honour my contractual obligations with the companies that I supply.”

With time, Erach was able to formerly register his business in order to obtain more funding from Stanbic Bank. He says having a good track record and also paying back the loans in time has helped increase his credit worthiness at the bank.

Advice to farmers
“My advice to farmers is to take advantage of these financial products to scale up production and grow,” he says.

“In this business of produce, you need a lot of money, and we normally borrow from Stanbic Bank and get our money processed very fast. The interest rate is also low which allows you to pay the money smoothly,” he says.

Erach is one of the key clients that has benefited from Stanbic Bank. He majorly deals in grain products such as sesame. To date, Erach mainly utilises the bank overdrafts and unsecured personal loans to supplement his income and also enable him buy more grain.

Through this he has been able to buy trucks to transport his produce and also expand the business and also pay school fees for his children.

Another customer, Tony Olipa who is also in the business of produce has been able to benefit from the Stanbic Bank agriculture financing.
He mainly uses the overdraft product to finance his business operations.

“Through my partnership with the Bank I have been able to buy my own land and also cultivate the produce. I have bought trucks and they have generally helped me to grow by formalising my business,” he said.

Stanbic Bank Uganda launched the unbeatable loans campaign aimed at creating awareness about the various financing solutions currently available. The campaign was launched on February 10 and will run until May 31, 2020, showcasing the banks unbeatable range of products that customers or the general public can access from personal loans, to home loans or instant overdrafts; all at the lowest market rates.

Stanbic Bank Head of Personal Markets, Israel Arinaitwe says providing quick and affordable financing is a key component to growing Uganda’s economy. “As the leading bank in the country, Stanbic plays an important role by growing clients’ activities and businesses by providing financial solutions that meet their needs. We offer tailor-made solutions at the best rates in the market,” he said.

The latest data from Bank of Uganda December 2019 Monetary Policy Report on private sector credit growth shows a decline in the fourth quarter (Q4). This was a reflection of the slowdown in economic activity. The data shows how banks have a role to play in kick-starting economic activity through lending.
The Stanbic lending campaign is geared towards aligning with the country’s objective of driving private sector growth.

Arinaitwe said providing loans to farmers is important for the economy, because, individuals and agribusinesses need credit for expansion and also cater for short-term and long-term needs.
He says farmers should not fear to take up agricultural loans because they can be more accommodative basing on the farming seasons.

Funding
How does one qualify to access funding?
In order to qualify for funding, you must have a good credit history that can be demonstrated. “The first requirement is for one to open an account with us. For clients already banking with us, we have sight of your banking history already whereas those who have just opened accounts, we review your 6 months statement from your previous bankers,” Mr Arinaitwe said.