400,000 benefit from micro loans for farming

June 1, 2017 in Finance, Land & Agriculture by Editor

June 1—The Microfinance Support Centre (MSC) is currently working at providing financial and technical help to over 400,000 farmer groups spread across the country under an agricultural loan scheme, but officials say other partners are urgently needed to make a lasting impact.

During a recent networking event, MSC Chief Executive Officer, Fred Mwesigye said  “We can only offer loans to these farmers, but we need partners who can help in modernising agriculture to come on board. Uganda will never achieve a middle income status if we do not modernize the agricultural sector.”

Currently MSC is supplying over UGX1.6 billion (about $445,000) to over 1614 client institutions in different parts of Uganda. Over 3457 groups have so far gained from the funds.

“That is why we invited partners so that we can see how we can reach more farmers deep in the villages and help them earn a decent living from agriculture,” Mwesigye said.

He said although Uganda has an agricultural-based economy, agriculture still remains the least funded sector with almost 69% of the farmers still carrying out subsistence farming and earning little income for their efforts.

Uganda is a signatory to the 2003 Maputo Declaration that stipulated governments annually put aside 10% of the national budget for agriculture development. Uganda has not managed to keep the pledge and according to critics the share to agriculture has been steadily falling. It is about 6% now.

Mwesigye said MSC channels loans through village savings and credit cooperative( Saccos) and different groups. He said much more resources are needed to shift rural folk into commercial or modern farming.

William Matovu, the Heifer Uganda Country Director, who are partnering with MSC in several poverty reduction programmes, said funding remains a huge problem.  He said frequently many upcountry people are not even aware of the availability of small interest loans that are being issued out by MSC through village Saccos.

He said, “Agriculture is a hard business to fund, because of the uncertainties that are involved. However it is the only possible way to eliminate poverty in the majority of Ugandans. That’s why it is important for government to continue funding it by providing subsidized loans and also providing the technical knowledge needed to improve agriculture.”

MCC is a governmental organization mandated by Uganda government to provide financial and business development services to small and medium businesses that are still in their start up stages. It has different loan schemes that include agriculture loan, commerce loan, business development loan,  teachers loan and environmental loan.