Kampala, 19th December 2024: PostBank Uganda has been selected to provide interest-free loans to large-scale commercial farmers under a new government financing scheme aimed at enhancing food security and addressing supply chain challenges.
The scheme, which is part of the government’s efforts to promote agro-industrialization and support the 10-fold growth strategy, will provide timely, affordable, and accessible financial resources to farmers.
Speaking at the launch, PostBank Uganda’s Managing Director Julius Kakeeto emphasized the importance of financing large-scale farmers. “We are thrilled about the government’s initiative, which we believe will address two major challenges: food security and supply chain constraints,” said Mr. Kakeeto. “This initiative will enhance food security.”
PostBank Uganda, along with other government-owned financial institutions, including Pride Bank and Housing Finance Bank, will provide a principal amount of UGX 176 billion under the scheme. The government will meet the corresponding interest component of Shs 40 billion annually.
The scheme has a flexible loan repayment plan and will initially run for six years. To be eligible, companies, cooperatives, and other qualifying entities must have available land or be engaged in large-scale farming with a minimum of 50 acres of land.
The scheme establishes a financing mechanism to support private large-scale commercial farmers in producing 132,600 metric tons of maize, beans, soya beans, sorghum, and animal feeds on a total proposed acreage of 114,661 acres.
PostBank Uganda has a history of supporting agricultural initiatives, having previously extended UGX 110,182,353,994 to 887 farmers as of 31st October 2024.
The Finance Minister Matia Kasaija, who presided over the launch, explained that the scheme aims to provide timely, affordable, and accessible financial resources to farmers.
“This scheme is not just about funding; it’s about building a strategic partnership between the government, financial institutions, and farmers. It’s investing in the future of farming and our country,” Minister Kasaija said— commending financial institutions for accepting to support this scheme.
“To our farmers, this is your opportunity to take your operations to the next level. With the right financial support, you can access better equipment, expand your land, and improve your yields,” he added.
Agriculture Minister Frank Tumwebaze emphasized that the money is not for trading but production. He added that his ministry will share profiled large-scale farmers with the Ministry of Finance and financial institutions in all districts of Uganda.
Permanent Secretary and Secretary to Treasury Ramathan Ggoobi noted that the scheme will support the government’s Tenfold growth strategy, aiming to grow Uganda’s GDP from about US$ 50 billion in FY2022/23 to US$ 500 billion by 2040.
Agro-industrialization, an anchor sector of the strategy, aims to commercialize and formalize farming, leading to a fivefold growth of agro-industrial exports with an estimated value of US$ 20 billion.
Key Highlights of the Scheme:
– Implementation: Government-owned financial institutions, including PostBank Uganda, Pride Bank, and Housing Finance Bank, will provide a principal amount of UGX 176 billion.
– Interest Component: The government will meet the corresponding interest component of Shs 40 billion annually.
– Repayment Plan: The scheme has a flexible loan repayment plan and will initially run for six years.
– Eligibility: Companies, cooperatives, and other qualifying entities must have available land or be engaged in large-scale farming with a minimum of 50 acres of land.
