Ministers Matia Kasaija, and Frank Tumwebaze displaying the newly signed deal
HABARI DAILY I Kampala, Uganda I PostBank Uganda is one of the 3 banks that have been lined up by the Government to provide interest-free loans to large-scale commercial farmers around the country.
The new initiative, which is under a new Government financing mechanism, is aimed at enhancing food security and addressing supply chain challenges.
“This is part of our efforts to promote agro-industrialization and support the 10-fold growth strategy,” said Matia Kasaija, the finance minister. He made the remarks during the resent unveiling of the scheme in Kampala recently.
He added that the scheme will provide timely, affordable, and accessible financial resources to farmers.
Julius Kakeeto, the PostBank Managing Director emphasized the importance of financing large-scale farmers.
“We are thrilled about the government’s initiative, which we believe will address two major challenges which include food security and getting rid of supply chain constraints,” he said.
The other two Government-owned banks taking part in the scheme include Pride Bank and Housing Finance Bank. They will jointly provide a principal amount of sh176 billion under the scheme. The government will meet the corresponding interest component of sh40 billion annually.
According to a press statement issued by Priscilla Akora, PostBank’s Head of Marketing and Communications, the scheme has a flexible loan repayment plan and will initially run for six years.
“To be eligible, companies, cooperatives, and other qualifying entities must have available land or be engaged in large-scale farming with a minimum of 50 acres of land,” she said.
Ministers Frank Tumwebaze (L) and Matia Kasaija, appending their signutures on the new scheme
She added that the scheme establishes a financing mechanism to support private large-scale commercial farmers in producing 132,600 metric tons of maize, beans, soya beans, sorghum, and animal feeds on a total proposed acreage of 114,661 acres.
Akora pointed out that PostBank has a history of supporting agricultural initiatives, having previously extended sh110b to 887 farmers as of 31st October 2024.
Matia Kasaija, the Finance Minister, who presided over the launch, explained that the scheme aims to provide timely, affordable, and accessible financial resources to farmers.
“This scheme is not just about funding; it’s about building a strategic partnership between the government, financial institutions, and farmers. It’s investing in the future of farming and our country,” he said.
He commended PostBank, among other participating financial institutions for accepting to support this scheme.
“To our farmers, this is your opportunity to take your operations to the next level. With the right financial support, you can access better equipment, expand your land, and improve your yields,” he added.
Frank Tumwebaze, the Agriculture Minister emphasized that the money is not for trading but production.
“My ministry will share profiled large-scale farmers with the Ministry of Finance and financial institutions in all districts of Uganda.”
Ramathan Ggoobi, the finance ministry’s Permanent Secretary and Secretary to Treasury noted that the scheme will support the government’s Tenfold growth strategy, aiming to grow Uganda’s GDP from about $50 billion in FY2022/23 to $500 billion by 2040.
Agro-industrialization, an anchor sector of the strategy, aims to commercialize and formalize farming, leading to a fivefold growth of agro-industrial exports with an estimated value of $20 billion.
The scheme, which has a flexible loan repayment plan and will initially run for six years.
PostBank, which is a fully-fledged commercial bank, boasts of a wide branch network of 58 branches countrywide, and over 3,000 agents. It is owned by the Government of Uganda with 100% shareholding
Akora said the bank is purposed to foster posterity for Ugandans and has since its establishment extended tailored financial services to enable them to Grow and Prosper by facilitating their participation in social economic activities that improve their livelihoods.
According to Julius Akais Osauro, PostBank’s supervisor of agriculture and their agriculture loan book has grown by over 70% since 2021.
“This is set to double to sh200b by the end of next year since 2020. While it has been a steep learning curve, the lessons are transferable to the sector and can benefit the overall economy with the right support from the government and other partners,” he said.
