How Equity’s UGX 130 billion loan book has helped commercialize small-holder farmers into vibrant agri-business owners

With more than two-thirds of Uganda’s population dependent on agriculture for a livelihood and a rapidly expanding population, investing in agriculture does not only boost food security but can also be a pathway to job creation.

A majority of Ugandan farmers are smallholders producing primarily to meet their immediate food needs, with a small surplus going to the market. Improving the productivity of small-scale food producers through secure and equal access to land and inputs, knowledge, financial services and markets, holds immense promise for socio-economic transformation.

"For our agricultural lending, we started by focusing on smallholder farmers with loans as low as UGX 100,000. While this might seem modest, these funds have significantly impacted the farmers' operations. Currently, our total lending to this sector exceeds UGX 20billion" said Francis Nsansa, Manager Agri-business at Equity Bank Uganda.

Equity Bank has not only managed to support farmers but also other value chain players such as suppliers of inputs, processors, and aggregators. Through several products, Equity Bank has been supporting agricultural commercialization by funding agro-processing and better access to markets by farmers. Improved incomes for rural households can reduce poverty and have positive knock-on effects on social indicators such as health and education.

So far, the Bank has given loans worth UGX 130 billion to 71,423 Ugandan small and medium-sized farmers. Financial intermediation has supported food production, processing for value addition, transport, and boosting access to local and regional markets.

The financial support has seen   increased production by supporting the adoption of improved seed varieties and technologies, such as tractors. These advancements help farmers plough larger fields, enhancing quality, quantity, and overall efficiency,” said Nsansa.

“Through our agribusiness financing, we’ve also supported climate-smart practices, such as irrigation systems, which are essential for managing irregular rainfall. Many farmers have successfully implemented these systems on their farms,” he continued.

Farmers are not just given money but are also trained to manage their enterprises better through financial literacy and the application of modern farming practices.  Over 10,000 farmers have been trained in financial literacy and enterprise development while hundreds of Village Savings and Loan Associations (VSLAs)  have been banked.

Additionally, in a bid to solve the challenges smallholder farmers face while trying to acquire loans such as data storage, pests and diseases, turnaround time and outdated traditional equipment, Equity Bank has gone the extra mile to put in place systems to help combat these challenges.

For risks such as pests, diseases, and weather changes, Equity Bank has a fully - fledged bancassurance team that provides coverage for these associated risks. Additionally, the bank supports reforestation programs focused on tree planting.

As a result, Equity Bank's efforts earned it the national Agri-Financer of the Year accolade at the Annual Agricultural Awards, an appreciation to its contribution towards Uganda’s agricultural sector.