Post Bank Uganda to become agriculture bank!
KAMPALA– Operation Wealth Creation [OWC] officials have asked government to transform Post Bank Uganda into an agriculture bank so that farmers in the country can access low interest loans to fund their activities.
A recent letter addressed to the OWC Chief Coordinator, Gen. Salem Saleh, said agriculture is the backbone of Uganda employing close to 68 percent of the population.
The letter written by the OWC Procurement and Seeds Monitoring Officer, Rtd Lt. Moses Mugisha Mugufuri, argues that instead of government scattering funds in uncoordinated projects, all these funds should be put in one pool for easy accessibility by the farmers.
Lt. Mugufuri, who is also the national chief coordinator for the transformation cadre association, said the government should pool funds from NAADS, Emyooga, micro-finance, youth livelihood fund, and women livelihood fund among others, to the farmers’ bank.
The officials said there is a need to fast-track the formation of agriculture and cooperative banks in the country.
“I have observed that there is a missing link that affects people engaged in agriculture due to the absence of robust agriculture financing,” Mugufuri said in his letter to Gen. Saleh.
Mugufuri in his letter said since 1990, the government has instituted a number of reforms meant to enhance production, competitiveness, and household income as advised by the World Bank and International Monetary Fund [IMF]. These were seen to bring Uganda into a middle income by 2020. We have not gotten there yet,” he said.
Lt Magufuri said the agriculture bank would also lead to the successful implementation of the Parish Development Model [PDM]. However, it remains to be seen whether the government will accept to turn Post Bank into an agriculture bank.
Since the Cooperative Bank closed shop, Uganda’s co-operative societies, traders, and farmers experience difficulty in accessing loans from commercial banks, on account of high interest rates and unfavorable repayment terms.
The Cooperative Bank, established in the 1960s was closed due to “inadequate capitalisation” and “insolvency to the tune of Sh 4.8 billion, as at December 31, 1998. The bank’s collapse was also a result of the withdrawal of support by USAID, and a case of fraud involving bank officials.
Since 2008, there have been efforts to re-open the bank or create a replacement. In June 2019, then trade minister Amelia Kyambadde set a target of 2021 for the establishment of the bank.
https://thecooperator.news/fronasa-launches-sacco-calls-for-return-of-cooperative-bank/
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