PostBank Uganda has been selected as one of the key financial institutions to provide interest-free loans to large-scale commercial farmers under a new government financing scheme.
The scheme, launched as part of the government’s agro-industrialization and Tenfold growth strategy, aims to transform Uganda’s agriculture sector by offering timely, affordable and accessible financial resources to qualifying farmers.
Speaking at the launch, PostBank Uganda’s Managing Director, Julius Kakeeto, highlighted the transformative potential of the initiative. “We are thrilled about the government’s initiative, which we believe will address two major challenges: food security and supply chain constraints. This initiative will enhance food security and drive agricultural growth,” he noted.
Under the scheme, PostBank Uganda, Pride Bank and Housing Finance Bank will collectively provide a principal amount of UGX 176 billion, while the government will cover the annual interest component of UGX 40 billion.
The scheme is designed with flexibility in mind, offering a six-year repayment plan. Eligible entities, including companies, cooperatives and large-scale farmers with a minimum of 50 acres of land, will access funding to produce key commodities such as maize, beans, soya beans, sorghum and animal feeds.
The initiative is expected to support the production of 132,600 metric tons of agricultural commodities on 114,661 acres of land, significantly boosting Uganda’s food security and agro-industrial exports.
Finance Minister Matia Kasaija, who presided over the event, commended the collaboration between government and financial institutions. “This scheme is not just about funding; it’s about building a strategic partnership to secure the future of farming in Uganda. To our farmers, this is your chance to expand operations, improve yields and access better equipment,” he said.
Agriculture Minister Frank Tumwebaze emphasized that the funds are strictly for production, not trading, and pledged his ministry’s support in profiling eligible farmers across Uganda. Permanent Secretary and Secretary to Treasury Ramathan Ggoobi emphasized the scheme’s alignment with the government’s Tenfold growth strategy, which aims to grow Uganda’s GDP from $50 billion in FY2022/23 to $500 billion by 2040.
Agro-industrialization as the core of this strategy, is expected to drive a fivefold increase in agro-industrial exports, valued at $20 billion.
PostBank Uganda has a long-standing commitment to supporting agriculture having previously disbursed UGX 110 billion to 887 farmers as of October 2024. This new scheme further cements the bank’s role as a key driver of Uganda’s agricultural transformation.
Key Highlights of the Scheme
- Implementation: Government-owned financial institutions, including PostBank Uganda, Pride Bank, and Housing Finance Bank, will provide a principal amount of UGX 176 billion.
- Interest Component: The government will meet the corresponding interest component of Shs 40 billion annually.
- Repayment Plan: The scheme has a flexible loan repayment plan and will initially run for six years.
- Eligibility: 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.
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