49.9 bn Agricultural Credit Fund Unused

The Agricultural Credit Facility (ACF) is a Government of Uganda (GoU) programme that was established in 2009. A document that is published online by the Bank of Uganda (BoU), a brief for clients, explains the ACF and its purpose as follows:

“The ACF was set up by the GoU in partnership with Commercial Banks, Uganda Development Bank Ltd (UDBL), Micro Deposit Taking Institutions (MDIs) and Credit Institutions all referred to as Participating Financial Institutions (PFIs) in order to facilitate the provision of medium and long term loans to projects engaged in agriculture and agro-processing on more favourable terms than are usually available from the PFIs. Loans under the ACF are disbursed to farmers and agro-processors through the PFIs. The scheme is administered by the BoU. It operates on a refinance basis in that the PFIs disburse the whole loan amount to the sub-borrower and then apply to BoU for the 50 percent GoU contribution.”

During the Joint Agriculture Sector Annual Review (JASAR) 2016, we learned that the GoU rated its ACF as having achieved an 81 percent score – a good performance – for its physical performance for the released resources.

At the JASAR 2016 as well we learned that available to the ACF for the financial year 2015/2016 was 58 billion shillings for accessing credit on favourable terms to farmers and agro processors that were engaged in agriculture and agro-processing.

According to GoU officials at the JASAR 2016 only 14 percent of those available funds were actually utilised during the year. To continue reading the detailed analysis click here.

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