By Prossy Nandudu
Farmers under The Grain Council of Uganda (TGCU) are to access loans from Centenary Bank ahead of the next planting season.
The loan facility will first benefit 12,000 farmers dealing in the production of crops such as maize, beans, Irish potatoes and soy beans.
Of these, 8,000 would be selected from the northern region while the rest will go to farmers in other parts of the country in the same value chains.
This follows the signing of a memorandum of understanding between the bank and The Grain Council of Uganda on Friday.
Loans for farming
Under the arrangement, the beneficiaries will access loans at an interest rate of 12% for different activities such as opening of land, seed loans and agro chemical loans for crop protection, among others.
Under the same arrangement, members of the grain council will also be given loans to enable them purchase produce from farmers.
The managing director of Afrokai, a grain trading hub, and member of TGCU, Chris Kaijuka, said they have been working, especially with small-scale farmers where the issue of quality and volumes were being compromised.
“We felt it important to group farmers together to enable them access loans so that we can have the quantities we need, of the right quality and harvested in a uniform manner. The missing link has been finance,” Kaijuka said.
He added that the demand for grains from TGCU members is 1 million metric tonnes annually while for Afrokai alone, the demand is 50,000 metric tonnes.
“You can imagine if you are not organised to consolidate production, we shall not have the volumes we need so through this partnership we are likely to achieve targets,” Kaijuka added.
Commenting on the development, Geoffrey Wanyama, the agribusiness manager at Centenary Bank, said the partnership is a deliberate move to have an organised farming system.
He called on farmers to take advantage of groups and associations to get help. The loans, Wanyama said, will benefit farmers who own two acres of land and above.
“The challenges of going alone is that you achieve much but with a team of organised farmers, suppliers including banks, will find you,” Wantama said.
