Minister Kasaija advocates for increased access to credit for agricultural sector as aBi marks decade
The Minister for Finance, Matia Kashaija has said there is need for incentives to ensure financial institutions extend as much credit facilities to farmers as possible as one of the ways to boost the agricultural sector. Kashaija made the remarks as Agricultural Business Initiative (aBi) marked 10 years since it was founded in 2010 by governments of Uganda and Denmark, at Kampala Serena Hotel.
He said that government has contributed to the agricultural sector through financing of value chains mainly through interventions at the Ministry of Agriculture, Operation Wealth Creation, NAADS and the Agriculture Credit Facility housed in Bank of Uganda.
“Under the Agricultural Credit Facility, the uptake by government and partners has steadily increased and this is reflected in the portfolio of loans disbursed amounting to shs331billion extended to 525 projects across the country,”Kasaija said.
“There is a need to increase credit access to the sector through a multipronged approach focusing on all financial institutions but with special focus on the lower tier financial institutions, as they operate in close proximity to agricultural value chain actors most constrained by limited institutional capacity and financial resources.”
The Minister, who was represented by Hon. David Bahati, the State Minister for Planning, commended aBi and other development partners including Danish, Swedish, Netherlands, Belgian, American, German, UK and European Union governments for their support towards the agricultural sector for a number of years.
“Your support towards the operationalization of the existing development cooperation agreement has supported the implementation of the National Development Plans (NDP) and the Uganda Vision 2040. In addition, by aligning your development support to the national development priorities, you are helping in transforming Uganda from peasantry to a modern and prosperous country.”
The aBi chairperson, Sarah Walusimbi said between 2014 and 2018, they implemented over 130 grant projects valued at shs345 billion to reach over 600,000 farmers and increased to creation of income and increasing household incomes and agribusiness. “Going forward, the thrust will see aBi supporting the introduction of new Fin-Tech enabled methods to broaden and deepen financial services in rural areas to drive financial inclusion. We are now in position to assist a wide range of financial institutions to reach out and meet needs of agricultural businesses,” Walusimbi said. She noted that the targeted outcome of their new five –year business strategy is to apply more innovative financing models to strengthen the agribusiness capacity of farmer organizations.
According to Josephine Mukumbya, the Chief Executive Officer at aBi, we have channeled development funding as matching grants and business development services to agricultural producers and agribusinesses to enhance their management, production, productivity, value addition, income, profitability and employment.
Agriculture remains the major source of livelihood in Uganda and according to the Uganda National Household Survey (UNHS) 2016/17, the bigger proportion of the working population is engaged in agriculture, forestry and fishing (65%).