Affordable Farm Loans for Uganda’s Farmers
Uganda farmers can now access affordable loans to finance their Agribusiness ventures through the Bank of Uganda's Agricultural Credit Facility
For years, access to affordable financing has remained one of the biggest hurdles holding Uganda’s farmers back. Fortunately, that is changing. The Bank of Uganda, in partnership with commercial banks and other financial institutions, established the Agricultural Credit Facility (ACF) in 2009 and it could be exactly what your farming business needs to grow. Whether you are a smallholder farmer looking to buy equipment, a grain trader seeking working capital, or an agro-processor ready to scale up, the ACF was designed with you in mind.
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Unlike conventional bank loans that come with high interest rates and rigid terms, the ACF offers financing at a maximum of just 12% per annum, with repayment periods of up to 8 years. Moreover, the facility is accessible through over 30 financial institutions spread across Uganda, meaning you do not have to travel far to apply.
In this article, we break down everything you need to know about the ACF, from eligibility and loan terms to exactly where you can walk in and apply.
What Is the Agricultural Credit Facility?
The Agricultural Credit Facility is a government-backed loan scheme administered by the Bank of Uganda. It was created to commercialize agriculture by providing short, medium, and long-term financing to farmers, agro-processors, and grain traders operating in Uganda.
The facility is funded jointly by the Government of Uganda and Participating Financial Institutions (PFIs), which include commercial banks, credit institutions, and microfinance deposit-taking institutions. As a result, borrowers benefit from lower interest rates than they would typically find on the open market.
Who Qualifies for an ACF Loan?
The good news is that the ACF is open to a wide range of applicants. Specifically, the following entities are eligible:
- Individual farmers and private sector businesses
- Partnerships and registered companies
- SACCOs of any size
However, all applicants must be operating in Uganda and actively engaged in agriculture, agro-processing, or the grain trade.
What Can You Use the Loan For?
The ACF covers a broad range of productive agricultural investments. Therefore, you can use the loan to finance:
- Purchase of agricultural and agro-processing machinery and equipment
- Post-harvest storage facilities
- Agricultural inputs such as seeds and fertilizers
- Hiring out agricultural machinery to other farmers
- Purchase of biological assets (livestock) up to UGX 250 million
Nevertheless, it is equally important to know what the facility does not cover. The ACF will not finance land purchases, tree planting, refinancing of existing loans
Terms To Consider
Understanding the terms upfront helps you plan better. Here is a summary of what to expect:
Loan Amount: The maximum loan is UGX 5 billion, though this ceiling can be lifted for high-impact projects. For grain traders, the maximum rises to UGX 10 billion.
Interest Rate: The interest rate is capped at 12% per annum for standard agriculture and agro-processing loans, and 15% per annum for grain trade financing. Importantly, this rate is fixed throughout the loan period, so there are no unpleasant surprises later.
Repayment Period: You can repay your loan over a period of 6 months to 8 years, depending on your project needs. Grain trade loans, however, have a shorter maximum tenure of 24 months.
Grace Period: If your project needs time before it starts generating revenue, the ACF offers a grace period of up to 3 years, giving you breathing room before repayments kick in.
Processing Fees: Processing fees charged by the PFI must not exceed 0.5% of the total loan amount, keeping upfront costs manageable.
Don’t Have Collateral? There Is Still a Way In
Many farmers worry that lack of collateral will disqualify them. Fortunately, for loan amounts of UGX 20 million or less, PFIs can consider alternative security arrangements. These include chattel mortgages, credit ratings, bank statements, and business cash flow records. Consequently, even smallholder farmers without formal land titles have a realistic path to accessing credit.
How to Apply for the ACF
Applying is straightforward. Simply walk into any of the Participating Financial Institutions of your choice and submit your application directly to them. The PFI will then assess and appraise your project before forwarding it to Bank of Uganda for Approval
Some of the institutions where you can apply include;
Commercial Banks
- ABC Capital Bank Uganda Limited
- Absa Bank Uganda Limited
- Bank of Africa Uganda Limited
- Bank of Baroda Uganda Limited
- Bank of India Uganda Limited
- Cairo Bank Uganda Limited
- Centenary Rural Development Bank Limited
- Citibank Uganda Limited
- Dfcu Bank Limited
- Diamond Trust Bank Uganda Limited
- Ecobank Uganda Limited
- Equity Bank Uganda Limited
- Exim Bank Uganda Limited
- Guaranty Trust Bank Uganda Limited
- Housing Finance Bank Uganda Limited
- I & M Bank Uganda Limited
- KCB Bank Uganda Limited
- NCBA Bank Uganda Limited
- Opportunity Bank Uganda Limited
- Pearl Bank Uganda Limited
- Stanbic Bank Uganda Limited
- Standard Chartered Bank Uganda Limited
- Tropical Bank Limited
- United Bank for Africa Uganda Limited
Credit Institutions (Cls)
Here are the institutions with their embedded website links:
Micro-Deposit Taking Institutions (MDIs)
Here are the links:
Impact of the Agricultural Credit Facility Since Inception
The Bank of Uganda, acting as Fund Administrator, reported that the Agricultural Credit Facility has recorded significant and far-reaching impact since its inception.
The Bank stated that the ACF’s financing in the dairy and beef value chains had contributed to improved earnings for livestock farmers, better post-harvest management, and increased export earnings for the country. It was further noted that proper handling of dairy and beef products had minimised wastage and losses by prolonging shelf life through the adoption of better storage and handling infrastructure — ultimately allowing farmers to access markets without the pressure of selling at lower prices.
On portfolio growth, the Bank reported that the total loan book under the scheme had grown by UGX 64.90 billion during the quarter ended September 30, 2025, with funds disbursed to 2,397 new eligible projects. Cumulatively, the Bank indicated that total disbursements had risen from UGX 1.23 trillion as at June 30, 2025, to UGX 1.30 trillion, benefiting 10,063 beneficiaries across the country. These funds, it was noted, had gone towards agricultural mechanisation, post-harvest handling, irrigation, access to inputs, better livestock breeds, agro-processing, and grain trade.
The Bank further reported that supporting Micro, Small and Medium Enterprises (MSMEs) to access affordable financing and transition from subsistence to commercial agriculture remained a core objective of the facility. It was highlighted that MSMEs accounted for 88 percent of total beneficiaries, with borrowers under the Block Allocation arrangement alone accounting for 74 percent of the total number of beneficiaries.
Regarding portfolio quality, the Bank of Uganda reported that the facility maintained strong performance indicators, with non-performing loans standing at UGX 4.10 billion, representing a non-performing asset ratio of just 0.63 percent of the total government contribution disbursed as at September 30, 2025.
For the full breakdown of the facility’s performance, find the detailed report here.
Conclusion
The Agricultural Credit Facility is arguably one of the most farmer-friendly financing tools available in Uganda today. With low interest rates, flexible repayment terms, and wide accessibility, it gives Ugandan farmers a genuine opportunity to move from subsistence to commercial farming. Therefore, if you have been sitting on a farming idea due to lack of funds, now is the time to act. Visit the nearest participating financial institution and take the first step toward transforming your agricultural enterprise.
For more information, visit the Bank of Uganda website or inquire at any participating financial institution near you.
Disclaimer
Africa Agribusiness News (AAN) is committed to informing and empowering agricultural communities across Africa with timely and relevant industry information as per our mandate. This article has been compiled from publicly available materials issued by the Bank of Uganda and is intended for informational purposes only. Readers are advised to verify all details directly with the Bank of Uganda or a Participating Financial Institution of their choice before making any financial decisions.
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