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Why Ugandan Farmers Face Uphill Battle for Loans and Most Fail to Land Them

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Ugandan farmers struggle to get loans

Imagine wanting to start a farm or make your current one even better, but you need some cash. You apply for a loan probably an agricultural loan, but chances are it gets rejected! The Bank of Uganda says almost half of all applications for agricultural loans get turned down. This has left Ugandan farmers stranded the more.

Over the past 15 years, they’ve received tons of applications worth over a trillion shillings, but only about half that amount was actually approved. This year was a bit better, with more applications and more approvals, but still, it’s hard to get the money you need.

And guess what? Most of the money goes to men! Women only got about 19% of the loans. It’s like there’s a secret club, and it’s harder for women to get in. But have you wondered what is being asked as collateral to obtain these loans?

Kebirungi Molly, a farmer in Ntugamo explains the hectic hustle they go through to get loans as farmers, and she asked the government to help them access these funds in an easy way.

We go through a lot with unrealistic loans conditions, and even unrealistic collateral which banks ask for. This has hindered our production and it may keep affecting the whole production chains slowly until we can not produce anymore” she said.

Well, it is shocking that is why most men get them than women because of their collateral being available. The government is trying to help by making sure farmers can get affordable loans for all sorts of agricultural projects, like growing crops, processing food, and even buying cool machinery.

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They want to create jobs and help people earn more money. But it’s clear that getting loans is still a big problem for Ugandan farmers and something needs to change so Ugandan farmers can get the support they need to succeed!