Stanbic plays key role in funding agriculture sector

More than 70 per cent of Uganda’s population is employed in agriculture which contributes 25 per cent to our GDP.
As such supporting business development in Uganda is not complete until you support agro-business. As a bank that is strongly rooted in the growth and development of Uganda, Stanbic Bank Uganda has partnered with Nation Media Group (NMG) to help create awareness to the public and customers about the various agriculture products and services that can benefit farmers and agribusinesses across the country.
Stanbic Bank has a wide branch network across the country with more than 63 branches and more than 1,000.
This makes it easy for us to tap in to the agricultural economy which is common upcountry using a separate unit to handle agribusiness.
Our support towards the agriculture sector has mainly been through providing financial support in form of loans, credit facilities and overdrafts to farmers, agro-processors and aggregators, agriculture-related industries, cooperatives and key players in agricultural value chains across the country.
In 2018, the bank provided facilities worth Shs360b annually to the agricultural sector. This is by far the largest amount of any commercial bank spending in the sector in Uganda.
In addition, the bank also plays an important role in providing foreign currency advisory services to farmers and other agricultural stakeholders who are dependent on imported inputs to reduce risk by hedging themselves against exchange rate fluctuations.
With Stanbic Bank’s wide branch network spread across the country, it is able to support the rural areas.
This is the case in the peak harvest periods when the bank provides the much-needed financing and lines of credit that allow large scale buyers to purchase produce from small holder farmers. Stanbic also plans to be more involved with small holder farmers by developing products more suited to their size and needs hence the reason the bank recently launched an Agri-financing partnership with Consortium for enhancing University Responsiveness to Agribusiness Development Limited (CURAD).

Growing with our clients
Stanbic Bank continues to support the growth of businesses in agriculture. Among the key areas in agriculture where the bank is involved include; tea, sugar, coffee, cocoa, grain and much more across the regions. In the tea sector for example, Stanbic Bank is a key player funding both the small factories and large tea estates through revolving credit facilities which are of the utmost importance when it comes to Agribusiness financing for the harvests and the provision of financial instruments such as Letters of Credit for importers of agricultural inputs and machinery plus trade finance facilities. A key client with Stanbic is Rusekere Tea growers, a

large-scale tea processor and buyer, located in Fort Portal, Kabarole District. Stanbic provides about 90 per cent of all the loans and credit needed by the company in its operations and investment activities.
The business relationship between the bank and Rusekere started in 2012 when the owner of the company decided to scale up his operations and requested for and was given a loan of $2m by Stanbic to finance a new production line.
This allowed the company to significantly increase its processing capacity which at the time was about 1.5 million tonnes of tea leaves a year.
Today, Rusekere Growers exports more than 3.5 million tonnes of tea and is in the process of investing in a third tea production line to further increase its export capacity.
They employ about 250 workers directly and indirectly 1,200 out-growers and other service providers in the process supporting an ecosystem of

about 7,000 Ugandans.
Another key subsector that the bank finances is the grain. Stanbic has financed and is continuing to support the expansion of grain storage and processing facilities for key industry players in the formal grain trade. Notably is the Nile Breweries/Agroways partnership and the Uganda Breweries/Grainpulse partnership in which the two companies are the preferred procurement and storage of local raw materials for production of beer that include maize, sorghum, barley and cassava.
The grain financing is not limited to the two partnerships but also several SME traders that procure, aggregate and trade in grain.

The Agricultural Credit Facility (ACF)
Stanbic bank Uganda limited is one of the major participants in the Agricultural Credit Facility (ACF) which was set up by the government

in partnership with commercial banks.
The scheme’s operations started in October 2010 with the aim of facilitating the provision of medium and long term financing to projects engaged in Agriculture and Agro processing, focusing mainly on commercialization and value addition.
As a manifestation of the bank’s participation, Stanbic Bank Uganda Ltd was declared the best performing commercial bank 2019 in disseminating the ACF.
Stanbic agribusiness financing has played a key role in enhancing agriculture development in Uganda through provision of working capital and term facilities for the agriculture sector. This has had a pull effect of providing off take of primary agriculture produce from farmers, enhanced use of locally produced raw materials in the agro processing industries and contributed to foreign exchange earnings through facilitation and financing of export of agriculture commodities.
This has created employment and businesses along the agriculture value chains.

The writer is Sector Head for Agribusiness at Stanbic Bank Uganda