New NPA Report Shows How Understaffing Is Killing BoU-Administered ACF Intervention; Proposes Agricultural Financing Reforms

By Mulengera Reporters

Administered under the Bank of Uganda, the Agricultural Credit Facility (ACF) requires a major expansion of its workforce to cope with its current workload and meet targeted loan-processing timelines, according to an independent evaluation commissioned for the National Planning Authority (NPA).

The evaluation, released in May 2026, says the facility currently has only seven employees despite receiving an average of 244 loan applications every month.

It estimates that ACF would need about 48 employees to meet a service-level agreement of 1.5 days per application — 41 more staff than its current workforce.

At an estimated average monthly salary of Shs10 million, the additional employees would increase operational costs by at least Shs410 million per month, equivalent to about Shs4.9 billion annually.

The report recommends strengthening ACF’s institutional capacity alongside reforms aimed at improving monitoring, financing and coordination across Uganda’s development finance architecture.

ACF needs stronger monitoring and evaluation capacity

The NPA report recommends the establishment of a specialized monitoring and evaluation team within ACF.

The team would support project appraisal, verify the use of funds, track borrower performance and collect outcome data.

The report says stronger monitoring would improve accountability and evidence-based decision-making while enabling ACF to demonstrate the actual impact of public financing.

It argues that better evidence would also help the facility learn from implementation, improve delivery and maintain public and stakeholder confidence.

ACF urged to review interest rates

The report recommends that ACF regularly review its lending interest rates to reflect changing macroeconomic conditions.

It specifically points to movements in the Central Bank Rate as an important factor in determining whether the facility remains competitive.

The objective, according to the NPA findings, should be to preserve ACF’s concessional advantage while keeping its financing competitive with regional development finance institutions and Uganda’s commercial lending sector.

The review would also help ensure that ACF remains relevant to borrowers who are considered too risky by conventional lenders.

The evaluation recommends standardizing late-payment fees across Participating Financial Institutions (PFIs) through clear and consistent guidelines.

It proposes capped or tiered penalty rates to improve transparency, fairness and borrower protection while maintaining the financial sustainability of the facility.

Public banks urged to expand ACF lending

The NPA evaluation warns against excessive concentration of ACF lending among a limited number of institutions.

It recommends empowering public PFIs to expand their participation and help reduce concentration risk.

Public financial institutions, the report says, should lead in implementing the government’s principles of inclusive and transformative agricultural finance.

The ACF should strengthen partnerships with public banks through institutional onboarding, capacity building and operational incentives.

The evaluation identifies PostBank’s relative success in ACF delivery as a model that could be replicated by other public banks through peer learning.

For Uganda Development Bank (UDB), the report recommends increasing ACF application volumes through better internal pipeline alignment and setting annual targets for concessional agricultural lending.

Similar efforts are recommended for Pride Microfinance and Housing Finance Bank.

Stronger collaboration among development finance institutions

The report recommends closer collaboration between ACF and other development finance institutions, including UDB, Uganda Development Corporation (UDC), Microfinance Support Centre (MSC) and the Uganda Agricultural Insurance Scheme (UAIS).

It proposes joint sensitization campaigns, co-branded information materials and formal referral systems to help beneficiaries access complementary financial services.

For instance, the report says UDB, UDC and ACF could explore co-financing arrangements, while ACF borrowers could be connected to agricultural insurance services offered through UAIS.

Similarly, MSC could provide financing to out-growers linked to ACF-supported enterprises.

The evaluation says joint knowledge sharing, inter-institutional benchmarking, employee shadowing and shared customer-support and outreach services could reduce duplication and create cost savings. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).