Uganda agricultural credit reforms proposed amid new East African agribusiness funding

A new evaluation by Uganda’s National Planning Authority (NPA) has recommended significant reforms to the Agricultural Credit Facility (ACF) to improve inclusivity and oversight. The report highlights that the ACF’s Block Allocation Loan scheme has disbursed Shs18.6 billion to 2,767 borrowers, utilizing flexible collateral like chattel mortgages to assist micro and smallholder farmers. However, the NPA noted that these loans represent only about one percent of total ACF financing and suggested increasing funding and technical support for the scheme.

To enhance development impact, the NPA recommends that the Ministry of Finance, Planning and Economic Development exercise stronger oversight over development finance institutions (DFIs), including the ACF and the Uganda Development Bank. Proposed measures include establishing standardized reporting, performance-based incentives for participating financial institutions, and a digital pre-application system to improve visibility of borrower demand.

In a separate regional initiative, the International Fund for Agricultural Development (IFAD) and AgDevCo Ventures Limited have launched a $10 million financing package for early-stage agribusinesses. This program targets five East African countries—Ethiopia, Kenya, Rwanda, Tanzania, and Uganda—aiming to support up to 15 enterprises and indirectly benefit approximately 128,000 farmers while creating nearly 2,900 jobs over 12 years.