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With more than two-thirds of Uganda’s population dependent on agriculture for their livelihoods and a rapidly growing population, investing in agriculture can not only improve food security but also create jobs.
Most farmers in Uganda are smallholders who produce mainly to meet their immediate food needs, with a small surplus going to market. Improving the productivity of small-scale food producers through secure and equitable access to land and inputs, knowledge, financial services and markets holds great promise for socio-economic transformation.
“For our agricultural loans, we focus first on smallholder farmers, with loan amounts as low as UGX100,000. While this may not seem like a lot, these funds have a significant impact on farmers’ operations. Currently, our total loans to the sector are over UGX20 billion,” said Francis Nsansa, Agricultural Business Manager at Equity Bank Uganda.
Equity Bank has been successful in supporting not only farmers but also other value chain players such as input suppliers, processors and aggregators. Through a variety of products, Equity Bank supports agricultural commercialization by providing finance for agricultural processing and better market access for farmers. Improved rural household incomes can reduce poverty and have positive knock-on effects on social indicators such as health and education.
To date, the bank has disbursed loans worth UGX 130 billion to 71,423 Ugandan small and medium-sized farmers. Financial intermediation supports food production, value-added processing, transportation and expanded access to local and regional markets.
“Financial support has resulted in improved yields by supporting the adoption of improved seed varieties and technology, such as tractors. These advances have helped farmers cultivate larger plots of land, improving quality, yield and overall efficiency,” Nsansa said.
“Through our agribusiness financing, we also support climate-smart practices such as irrigation systems, which are essential for managing irregular rainfall. Many farmers have successfully implemented these systems on their farms,” he continued.
Farmers not only received funds, but also received training through financial literacy and application of modern agricultural practices to better manage their businesses. More than 10,000 farmers were trained in financial literacy and business development, and hundreds of Village Savings and Loan Associations (VSLAs) were provided with banking services.
Furthermore, to address the challenges faced by smallholder farmers in obtaining loans such as data storage, pests and diseases, turnaround time and outdated traditional equipment, Equity Bank has gone to great lengths to build systems to help address these challenges.
For risks such as pests, diseases and weather changes, Equity Bank has a sophisticated bancassurance team that provides coverage for these related risks. In addition, the bank also supports reforestation programs with a focus on tree planting.
As a result, Equity Bank’s efforts earned it the accolade of ‘National Agricultural Financier of the Year’ at the annual Agriculture Awards in recognition of its contribution to Uganda’s agricultural sector.
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