By By Reporter | Business Express
The Bank of Uganda (BoU) has disclosed that commercial banks and other participating financial institutions have cumulatively disbursed Shs1.23 trillion to agribusinesses under the Agricultural Credit Facility (ACF) since its inception in 2009.
The announcement was made by Richard Byarugaba, BoU’s Executive Director for Finance, who represented the Deputy Governor at The Global Influence Club event held at Sheraton Kampala Hotel on Tuesday, July 29, 2025. The gathering, which focused on “Breaking Barriers to Trade” for women entrepreneurs, attracted policymakers, financial experts, and business leaders.
Byarugaba explained that as of June 2025, the ACF had supported a total of 7,666 beneficiaries across Uganda, with loans extended under the scheme capped at an interest rate of 12% per annum. He emphasized that the facility has played a central role in strengthening the agriculture sector by enabling access to affordable finance.
“These funds have supported the acquisition of agricultural machinery and equipment for mechanisation, post-harvest handling, and irrigation to promote climate-smart agriculture. They have also facilitated access to inputs, improved breeds for increased yields, and agro-processing activities,” Byarugaba said.
He added that the scheme remains financially sound, with a non-performing loan (NPL) ratio of only 0.5% of the total government contribution disbursed as of June 30, 2025. This performance, he noted, is significantly better than the overall agriculture sector NPL rate of 3.9%. “The low NPL level demonstrates that ACF-supported investments are delivering value and strengthening repayment capacity,” he observed.
Beyond financing primary agriculture, the ACF has also extended credit to enterprises involved in agro-processing and grain trade, helping them expand market access and contribute to Uganda’s broader value chain development.
Turning to the day’s theme on trade, Byarugaba underscored the role of cross-border commerce in driving efficiency and economic growth. “Trade between nations fosters specialisation, which allows for efficient resource allocation and provides access to a wider variety of consumer goods and services. Generally, the world is better off when countries import products that are produced more efficiently and cheaply by others. Trade is, therefore, a powerful engine for economic development and a force for positive change,” he said.
He noted that BoU plays a central role in promoting trade competitiveness through monetary and financial stability. “We facilitate international trade by ensuring exchange rate and financial sector stability, which are important for competitiveness and for attracting private capital inflows. Through monetary policy, the Bank ensures price stability, while exchange rate management and payment systems guarantee that trade operates smoothly,” Byarugaba said.
However, he acknowledged that businesses still face multiple obstacles. At the international level, rising geopolitical tensions, complex customs procedures, high input costs, limited access to affordable finance, and competition from substandard imports continue to frustrate trade growth. Locally, inadequate transport and communications infrastructure further constrain trade flows and increase costs.
“These challenges are more pronounced for vulnerable groups, including women, youth, and informal sector players, due to their limited access to resources and exposure to exploitation,” he said. “Women traders, for example, may face discrimination, harassment, and violence arising from cultural and social norms that limit their participation in economic activities. On top of this, climate change shocks such as droughts and floods disproportionately affect vulnerable households and businesses in agriculture, further limiting their participation in trade.”
To overcome these barriers, Byarugaba called for deliberate interventions that promote inclusivity and resilience. “First, we need inclusive trade policies that protect vulnerable groups such as women, youth, SMEs, and smallholder farmers. Second, we must expand access to information on trade opportunities and affordable financing schemes to empower vulnerable groups to participate more effectively in production and trade. Skills training is also vital for improving productivity and competitiveness,” he advised.
He also stressed the importance of investing in climate-smart and sustainable agricultural practices, which would enable communities to withstand climate shocks and secure their production and trade. Additionally, he pointed to the need for stronger regional integration initiatives to expand markets for goods and services. “Such initiatives must be supported by improvements in transport, communication, and energy infrastructure, which are crucial for boosting production and lowering the cost of trade,” he concluded.
