The Ugandan government, in partnership with PostBank Uganda, has unveiled a groundbreaking financing scheme to support large-scale commercial farmers.
The initiative aims to enhance food security, strengthen supply chains, and drive agro-industrialization.
Under the scheme, PostBank Uganda will provide interest-free loans, with the government covering an annual interest cost of Shs40 billion.
The program will run for six years, offering a principal amount of Shs176 billion to eligible farmers, companies, and cooperatives engaged in farming on a minimum of 50 acres.
Speaking at the launch, PostBank Uganda Managing Director Julius Kakeeto lauded the government’s focus on agriculture as a cornerstone of national development.
“This initiative is a timely intervention to address critical challenges in food security and supply chain efficiency. It provides farmers with the financial tools to scale their operations and improve yields,” said Mr. Kakeeto.
The program targets the production of key crops, including maize, beans, soya beans, sorghum, and animal feeds, on over 114,000 acres.
The goal is to achieve a combined output of 132,600 metric tons annually.
Finance Minister Matia Kasaija emphasized the scheme’s significance in transforming Uganda’s agricultural landscape.
“This is more than funding; it is a strategic partnership between government, financial institutions, and farmers to secure our nation’s agricultural future. It’s an investment in the prosperity of our farmers and the country at large,” he said.
The scheme includes a flexible loan repayment plan designed to make it accessible and practical for farmers to expand their operations and invest in advanced farming equipment.
Agriculture Minister Frank Tumwebaze highlighted that the funds are strictly for production, not trading.
He stated that his ministry would work with the Ministry of Finance to profile and identify qualifying large-scale farmers in districts across Uganda.
Permanent Secretary and Secretary to the Treasury Ramathan Ggoobi underscored the scheme’s role in supporting Uganda’s Tenfold Growth Strategy.
The strategy aims to increase Uganda’s GDP from approximately $50 billion in the 2022/23 fiscal year to $500 billion by 2040.
“Agro-industrialization is a key pillar of this vision, focusing on the commercialization and formalization of farming,” said Ggoobi.
“This program is a critical step toward achieving a fivefold increase in agro-industrial exports valued at $20 billion.”
PostBank Uganda has already demonstrated its commitment to the agricultural sector, having extended Shs110 billion in loans to 887 farmers as of October 31, 2024.
