Commercial farmers in Northern Uganda urged to go for cheap ACF loans

LIRA CITY, March 5, 2025 – Commercial farmers in Northern Uganda have been encouraged to apply for loans under the Agricultural Credit Facility [ ACF ] to enhance agricultural productivity.

The ACF was established by the government in partnership with commercial banks, Uganda Development Bank Ltd [UDBL], Bank of Uganda, micro deposit-taking institutions [MDIs], and credit institutions to provide medium- and long-term financing for agriculture and agro-processing projects, with a focus on commercialisation and value addition.

Speaking at the groundbreaking ceremony for Dewilos Fish Farm in Amuca Ward, Lira City, Alice Akello, the Commissioner in charge of Resident District Commissioners in Northern Uganda, explained that loans under the ACF, which started operations in October 2009, come with very low interest rates. However, she noted that some banks are not fully transparent about the ACF, opting instead to offer their own commercial loans to farmers.

The maximum loan amount under the ACF is Shs 2 billion, though it can rise to Shs 5 billion on a case-by-case basis, with an interest rate of 12 percent per annum and 15 percent for working capital for grain trade.

The funds are jointly provided by the Government of Uganda [GoU] and partner commercial banks, each contributing 50 percent of any loan awarded to a farmer or agro-processor. MDIs and credit institutions contribute 30 percent, with GoU contributing the remaining 70 percent.

ACF loans support a wide range of activities across the agricultural value chain, including the acquisition of agricultural machinery and equipment, post-harvest handling tools, storage facilities, agricultural inputs, and irrigation systems, as well as agro-processing activities.

However, the ACF does not finance land purchases, tree planting, trading [except grain trade], or the refinancing of existing facilities.

Dewilos Fish Farm, founded in 2019 by Fiona Acayo Birungi and her husband Felix Okullo, began with a single fish pond. By 2022, the farm had expanded to 21 ponds, housing over 70,000 fish.

“You mentioned financial challenges, but when you are stuck, the ACF is there for commercial farmers like you,” Akello said recently.

She also expressed concern that partner commercial banks are not promoting the ACF, despite its low-interest loans.

Akello urged young people in northern Uganda to move away from seeking employment and instead take advantage of government wealth creation programmes, such as the Parish Development Model and Operation Wealth Creation.

She further encouraged locals to adopt the “four-acre model” of farming, where they can establish dairy, coffee, fish, and crop enterprises on one acre each, as promoted by President Yoweri Museveni.

She concluded by urging people to view farming as a business, noting that markets for agricultural products already exist globally.

https://thecooperator.news/bou-warns-banks-over-slow-disbursement-of-acf-and-sbrf-loans/