By Mulengera Reporters
Uganda’s Agriculture Credit Facility (ACF) has helped create an estimated 53,616 jobs and retain another 35,932 jobs, according to an independent evaluation by the National Planning Authority (NPA).
The evaluation, completed in May 2026, says the government-backed agricultural financing programme remains a relevant tool for closing Uganda’s long-standing credit gap, particularly for smallholder farmers, rural enterprises and other borrowers often excluded from commercial lending.
The assessment was commissioned by the Ministry of Finance, Planning and Economic Development as part of a broader evaluation of government wealth-creation and development financing mechanisms under Uganda Vision 2040.
The findings come as the government begins implementing the Fourth National Development Plan (NDP IV), which identifies agriculture as a critical sector in achieving Uganda’s development and economic transformation goals.
According to the evaluation, 62 percent of ACF-funded projects surveyed were able to hire new workers as a result of the financing, while half of the beneficiaries retained existing employees.
Surveyed agribusinesses also reported a 40 percent increase in staffing levels attributable to ACF financing.
“These outcomes reinforce ACF’s role in driving grassroots job creation,” the evaluation says, noting that employment generated through supported businesses contributes to inclusive growth, income security and poverty reduction.
UGX1.06 trillion disbursed
The evaluation found that between 2009 and December 2024, the ACF financed 6,021 projects with a cumulative UGX1.06 trillion.
The funds were channelled largely into agricultural production, agro-processing and grain trade — activities the NPA identifies as important drivers of rural livelihoods and national economic development.
On average, the facility has financed about 400 projects annually, worth approximately UGX67 billion.
The ACF operates through a blended financing model in which government funds are matched by participating financial institutions (PFIs). Over the past 15 years, PFIs cumulatively lent about UGX485 billion, compared with UGX495.6 billion provided by government.
The NPA says the model has effectively doubled the amount of credit available to agricultural borrowers, strengthening financing to a sector that has traditionally been underserved by formal financial institutions.
Smallholder farmers benefit
The evaluation also highlights the ACF’s Block Allocation product as a major contributor to financial inclusion.
Between 2021 and 2024, beneficiaries under the product accounted for 66 percent of all ACF loan beneficiaries. They were mainly smallholder farmers, informal groups and rural communities.
The NPA says the achievement is significant because lack of collateral remains one of the major obstacles to accessing formal credit in Uganda.
The evaluation cites estimates indicating that only about 20 percent of Ugandans possess land titles, while as many as 80 percent are excluded from formal credit systems because they lack acceptable collateral. Among small and medium enterprises, about 40 percent of loan applications are reportedly rejected, primarily because of inadequate collateral.
The Block Allocation approach, according to the NPA, has therefore helped overcome some of the structural barriers that prevent rural borrowers from accessing conventional loans.
Affordable, but room to improve
The ACF currently lends at 12 percent for agricultural production and 15 percent for grain production, rates the NPA says are among the lowest available to Uganda’s agricultural sector.
However, the evaluation notes that Uganda’s rates remain higher than those offered by some regional development finance institutions.
For example, Tanzania’s TIB Development Bank provides subsidised financing at rates of about 4 to 5 percent for targeted investments, considerably below the ACF’s 12 to 15 percent range.
The NPA says there is therefore scope for government to consider stronger support and more deliberate targeting if the facility is to achieve a greater transformative impact.
Beneficiaries largely satisfied
The evaluation found broad support for the ACF among beneficiaries, with 74 percent of surveyed borrowers saying they were satisfied with how the financing addressed their priorities.
The facility was also found to have a strong domestic ownership and employment footprint.
All businesses surveyed were owned by Ugandan nationals, while 98 percent of their employees were Ugandan citizens.
The findings suggest that public financing through the ACF is largely benefiting domestic entrepreneurs and contributing to local enterprise development.
NPA flags development-impact gaps
Despite the positive findings, the evaluation identified weaknesses in how the ACF measures its wider economic impact.
The facility does not currently incorporate development indicators into its loan appraisal processes, according to the report. It also does not consistently track outcomes such as job creation, tax revenue and foreign exchange earnings.
The NPA argues that systematically capturing these indicators would help government demonstrate the wider economic returns generated by public agricultural financing.
The evaluation says increased agricultural productivity, value addition, export volumes and formalisation of rural enterprises can broaden the tax base and increase government revenue.
It recommends strengthening the facility’s monitoring and evaluation systems so that its contribution to employment, productivity, tax revenue and other national development outcomes can be measured more effectively.
ACF remains key to NDP IV ambitions
Overall, the NPA concludes that the ACF remains a relevant development financing mechanism and an important instrument for expanding affordable credit to Uganda’s agricultural sector.
The evaluation recommends stronger targeting of high-impact segments, continued government support and reforms to address operational and institutional bottlenecks.
The findings are expected to inform government policy on the future role of development financing mechanisms in implementing NDP IV and achieving the long-term objectives of Uganda Vision 2040.
With agriculture positioned at the centre of Uganda’s transformation agenda, the NPA says strengthening mechanisms such as the ACF could help deepen financial inclusion, stimulate agribusiness, expand employment and accelerate development across the agricultural value chain. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
