Kapchorwa farmers urged to embrace banking services
Farmers in Bukwo weed a garden. Access to credit would boost their business. PHOTO BY STEPHEN OTAGE
In Kapchorwa District, located on the slopes of Mt Elgon in eastern Uganda, subsistence agriculture is the main economic activity. Farmers grow different crops ranging from beans, coffee, wheat, millet, maize among others. Despite this thriving economic activity in the region, farmers have been faced with numerous setbacks including being trapped in a vicious circle of borrowing from loan sharks.
“Most of us fear to apply for loans from the banks because of the 22 per cent to 30 percent high interest rates that the banks here tend to charge. Even if they went ahead to give us, farmers, the loans but then we fail to pay in time, won’t they end up taking all our property. ” says Joshua Chebrot, a farmer.
Embrace services
Chebrot strongly believes that the banks in the region need to do more sensitisation in order to address the loan sharks issue, that is, if they want the farmers to embrace their services.
During the opening of a new branch of Postbank in the region, the Managing Director, Stephen Mukweli, said banks are not in the business of selling off property; rather they take security as a caution to get the lenders committed to the project because they are using other people’s money to lend to other clients.
“The mistake that many borrowers do is that when they fail to pay back the loan, they instead avoid the bank. They switch off their phones. By doing that, they are definitely at a loss. Yet, if you went to the bank and explained that you had an arrangement with them but things did not go as planned, the situation would be different,” Mukweli stated. “The bank will obviously listen to your plight and will see how to help you in the end.”
Beneficiary
Robert Chemengu, 43, a farmer in the region supplements by stating that there are some farmers who are not afraid of taking the opportunities. “Over and over again, the banks have always urged us to apply for loans in order to improve our Agricultural work and that is what I decided to do recently. I applied for a Shs35million from Postbank and it was approved. I am going to use the money for buying a truck in order to transport and market my farm produce,” he says. Chemengu grows coffee on a two acre piece of land, beans on a five acre piece of land and maize on an 18 acre piece of land.
