For years, smallholder farmers across the country have struggled to convince banks that they are worthy borrowers. But things are changing – and the Bank of Uganda (BoU) wants farmers to start thinking beyond subsistence.
Through its Agricultural Credit Facility (ACF), the central bank is showing farmers that access to credit starts with simple habits: keeping money in the bank, taking basic records and treating security as a sign of responsibility – not fear.
‘Keeping money in the bank is the first step toward being bankable. It gives lenders a clear picture of how you earn and spend,’ says Jean Martina Ainembabazi, the Credit Appraisal Officer at BoU.
Uganda’s financial inclusion rate has improved but remains low – only 13 percent of adults have active bank accounts, according to the 2023 FinScope survey.
Most farmers still save in cash or informal groups. Ainembabazi says even modest deposits in a Sacco or bank account can make a big difference.
‘Banks lend to people they can trace. Every deposit you make is evidence of financial discipline,’ she says.
Keeping funds in circulation through the banking system also creates a transaction history forming the foundation for any credit assessment. The second step is record-keeping, which many farmers overlook. Yet, Ainembabazi says, it can be as simple as jotting down your harvests, sales and expenses.
‘You don’t need to be an accountant. A notebook showing how much you sold and what you earned is proof of business,’ she explains. That’s how John Kato, a maize farmer from Masindi, got his first loan.
‘I used to sell everything in cash. But when I started recording my sales and depositing part of it, the Sacco helped me get a loan to buy a maize huller. My profits tripled,’ Kato recalls.
Collateral isn’t a curse
Many farmers still fear the idea of collateral, assuming they need land titles or huge assets to qualify for loans.
‘Collateral simply shows that you are responsible. For loans under Shs20 million, movable assets such as livestock or produce stores can work,’ Ainembabazi clarifies.
Under the Agricultural Credit Facility, farmers can access loans of up to eight years, with grace periods of three years before repayment starts. Funds can be used to buy tractors, seeds, fertilisers, or value-addition machines such as hullers and millers – but not to purchase land, plant trees, or clear old debts.
Why the Agricultural Credit Facility matters
Launched in 2009, the ACF has disbursed more than Shs1.23 trillion to more than 7,600 farmers and agribusinesses.
The programme targets value addition and modernisation, helping farmers who once relied on middlemen to process and sell their produce.
‘Our goal is to move farmers from subsistence to business. We want to see more Ugandans producing for markets, not just for home,’ Ainembabazi says.
Women and youth, a new frontier
BoU’s strategy also focuses on women and youth, who make up most of Uganda’s agricultural workforce but remain underbanked. In districts like Mbarara and Mbale, women-led cooperatives have accessed ACF loans to buy milk coolers and maize milling machines, enabling entire communities to benefit.
‘Group applications are powerful. They build trust and reduce risk, especially for rural women,’ Ainembabazi notes.
Farmers’ money is safe
BoU’s efforts to deepen trust in the financial system are backed by the Deposit Protection Fund (DPF), which guarantees up to Shs10 million per depositor if a bank collapses.
‘That means your savings are safe. Farmers should never fear keeping their money in a bank – it’s far safer than under the mattress,’ Ainembabazi assures.
Agriculture employs over 65 per cent of Uganda’s workforce, yet access to affordable finance remains the missing link. BoU says digitising ACF applications and integrating SACCOs into the system will make loans faster and fairer.
‘Our dream is that every serious farmer in Uganda – no matter how small – can access affordable credit and grow,’ Ainembabazi says. For Uganda’s farmers, that dream begins with one small act: walking into a bank.
Five easy ways to make your farm bankable
Keep your money in the bank.
Even small deposits matter. Regular banking creates a financial history that lenders can trace when assessing your loan application.
Record everything
Use a simple notebook or phone app to track sales, harvests and expenses. Clear records show discipline and consistency – traits every bank values.
Join a Sacco or farmer group
Collective savings and group guarantees make it easier to access credit. Group lending also builds trust with financial institutions.
Use your assets wisely
Collateral isn’t a barrier, it’s proof of responsibility. Livestock, equipment, or even a produce store can help you secure smaller loans.
Borrow for value addition
Loans used for productive investments such as hullers, millers, or tractors generate income and raise your creditworthiness over time.