By Lazaro Apunyo
Some farmers in Karamoja Sub-region have asked the Bank of Uganda to ensure that commercial banks stick to the annual 12 percent interest cap for loans taken under the Agricultural Credit Facility (ACF).
The ACF, launched in 2009, is a public-private partnership meant to bridge the financing gap and support the commercialisation and modernisation of the agriculture sector.
Under the arrangement, commercial banks provide short, medium, and long-term loans to Ugandan farmers engaged in agro-processing, irrigation, post-harvest handling, machinery procurement, farm expansion, inputs purchase, and land opening, among others.
According to government, the agriculture sector is constrained by several factors like inadequate infrastructure, volatility of weather patterns, poor post-harvest handling, subsistence practices, and inadequate access to finance, and the ACF should be the solution to these challenges.
However, John Rex Achilla, a farmer from Kotido district expressed frustration with financial institutions, citing unfair loan terms, misclassified facilities, and hidden charges.
Mike Onyang Kidon, from Moroto district accused banks of continuing deductions even after loan clearance, which has demoralized farmers from applying for loans under the ACF.
Another model farmer, Mark Sire lamented that financial institutions often require large tracts of land, which excludes many smallholders in Moroto.
He therefore urged banks to consider small-scale farmers who want to scale up.
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