By Mulengera Reporters
More than three quarters of the Agricultural Credit Facility (ACF) loan value is concentrated in Uganda’s Central and Western regions, exposing persistent geographical inequalities in access to agricultural finance, according to a National Planning Authority (NPA) independent evaluation.
The evaluation, commissioned by the Ministry of Finance, Planning and Economic Development and released in May 2026, found that 54% of the total value of ACF loans had been disbursed in the Central region, while the Western region accounted for another 23%.
The Eastern region received 19%, while Northern Uganda accounted for only 5% of the total loan value.
The findings point to a significant mismatch between the ACF’s nationwide mandate and the actual distribution of financing, with lending largely following the geographical footprint of Uganda’s formal banking sector.
According to the evaluation, 54% of Uganda’s commercial bank branches are located in the Central region, compared with 16% in the Western region, 13% in the Eastern region and 11% in the Northern region.
The concentration of financial institutions therefore appears to be influencing where ACF funds are accessed, with participating financial institutions (PFIs) tending to lend in areas where formal financial services are already more established.
The NPA evaluation also links the imbalance to PFIs’ preference for larger corporate borrowers, many of whom are concentrated in Central Uganda.
The gap is particularly pronounced in Northern and Eastern Uganda, where access to formal financial services remains limited.
The report cites FINSCOPE 2018 data showing that more than 94% of residents in the Eastern and Northern regions remained outside the formal financial system, creating a major barrier to accessing ACF financing through conventional financial institutions.
However, the geographical distribution of ACF projects shows some signs of change.
The Western region, which initially accounted for 68% of Block Allocation projects in March 2021, saw its share fall to 45% by June 2024.
Over the same period, Northern Uganda recorded a substantial increase, with its share of projects rising from 6% to 25%.
The Central region’s share fluctuated, falling from 20% in March 2021 before recovering to 22% by June 2024, while the Eastern region remained persistently low, reaching only 8% by June 2024.
The shift suggests that the ACF has gradually expanded project coverage beyond its traditional strongholds, particularly into Northern Uganda. However, the evaluation warns that the gains have not translated evenly into loan values.
The Western region, for instance, continued to dominate actual loan disbursements, accounting for 67% of total loan value in March 2021 and 66% by March 2024.
This indicates that beneficiaries in the Western region were consistently accessing relatively larger loans than borrowers in other parts of the country.
Central Uganda recorded the opposite trend. Its share of total loan value fell sharply from 20% in March 2021 to 6% by March 2024, despite the region’s economic importance.
The NPA says the decline could point to reduced PFI engagement or lower borrower interest, and recommends reassessing strategies for maintaining the facility’s relevance and uptake in the region.
For Northern and Eastern Uganda, however, the bigger challenge remains access.
The evaluation recommends that the Bank of Uganda-managed ACF introduce regional funding quotas, including ring-fencing a portion of funds for underserved areas.
It also proposes incentives for PFIs that meet regional lending targets, together with stronger monitoring to ensure funds reach the intended areas.
The report further calls for greater involvement of SACCOs and microfinance institutions, as well as targeted financial literacy and mobilization campaigns.
The NPA argues that strengthening financial access in the North and East is necessary if the ACF is to become a more inclusive development financing instrument under Uganda’s Vision 2040.
It recommends collaboration with local governments, cooperatives and business development agencies to help smallholder farmers formalize their businesses, improve their financial readiness and become more attractive to lenders.
The proposed measures are aimed at moving the ACF beyond simply expanding the volume of agricultural credit to ensuring that where a farmer lives does not become a major determinant of whether they can access the facility. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
