Cooperatives Fail The Loans Acquisition Test

NWOYA – Without assets to stake as collateral, cooperative societies in the northern district of Nwoya have failed to snap up agricultural loans available in several banks.

John Bosco Odong, a member of Kochgom Cooperative Society, told theCooperator in a recent interview, that requirements for  cooperative societies to get an agricultural loans are quite stringent.

“Farming being an enterprise that comes along with several challenges, banks fear they might lose money since in agriculture there are several risks,” he said

According to him, banks refer to farming as a risky enterprise and are therefore reluctant to dole out loans to farmers.

Alfred Ocan, chairperson of Nwoya Rice and Cassava Cooperative, said they have tried severally and failed to get bank loans.

“We have now turned to microfinance support centers since banks cannot help us.” he said.

He said the government needs to revise the loan policy on collateral and other things, so that farmers can be supported.

Joana Akullu, a member of Amilobo Cooperative Society in Gulu, said, “It’s  more than 10 years now since the government allocated funds for farmers but in our group we have never accessed such loans.” Kenneth Kitara, the District Commercial Officer, said some cooperatives have not been able to access loans because many lack documentation on what exactly they do.

https://thecooperator.news/300-nwoya-farmers-targeted-for-irrigation-project/

“You might find that a cooperative has a storage facility where they gather their produce, but when you put them to task to explain the details of the storage and acreage of each farmer they get stuck,” he said.

“Many cooperatives have scanty documentation to attract bank loans, that is why many banks shunned them,” he said.

“We always put them to task to have proper records so that they can tap support from the government agricultural loans that were availed to them to improve their household income and create jobs,” he said.

In 2010, the government availed loans to farmers in Uganda and the money was channeled through banks and some microfinance institutions.

In 2016, the Central Bank revealed that the agricultural sector had the highest level of non-performing loans in Ugandan banks with 15.3 per cent.

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