Agricultural Finance in Uganda: The Way Forward

This report investigates the development of sustainable agricultural finance in Uganda and provides inputs to take the sector to new heights. By analyzing the macro and micro economic policies of Uganda, it:

• Identifies the major bottlenecks that hinder the emergence and development of financial services sector;
• Drafts a medium-term strategy for the support of agricultural finance.

The report states that:

• The demand level of farmers are of three different types - subsistence, semi-commercial and commercial - so service providers have to develop products that meet their specific needs;
• The Ugandan agricultural sector can only develop soundly if key actors receive signals concerning demand for products and the likely profitability of meeting such demand.

Finally, it recommends that there is a need to:

• Carry out a more detailed investigation of possible strategic interventions by Government to reduce the magnitude of farm-gate price-level uncertainty for key crops, e.g. maize;
• Prepare an Issues Paper as a preparation for a high level policy workshop;
• Collect and analyze information on the structure and performance of member-owned organizations in rural areas with a view to facilitating stakeholder deliberations leading to the development of a long-term strategy for this sector;
• Conduct a detailed analysis of the factors that impede and facilitate the expansion of branches of financial institutions in rural areas.