By Mulengera Reporters
The Bank of Uganda-managed Agricultural Credit Facility (ACF) is struggling to reach grain traders, with only 2% of surveyed beneficiaries identifying grain trade as their primary source of agricultural income, according to an independent evaluation by the National Planning Authority (NPA).
The finding highlights a significant gap in the reach of a facility intended to support Uganda’s agricultural economy, with grain trade attracting far less participation compared to other agricultural activities.
The evaluation, commissioned by the Ministry of Finance, Planning and Economic Development and released in May 2026, found that crop farming accounted for 71% of the primary agricultural income sources among surveyed ACF beneficiaries.
Livestock accounted for 14%, followed by poultry at 12%, while grain trade represented just 2%.
The figures point to a financing facility whose support is heavily concentrated in crop farming, leaving other parts of the agricultural economy with considerably less access to ACF financing.
The limited participation of grain traders is also reflected in the ACF’s project portfolio.
By September 2024, grain trade accounted for only 6% of approved ACF projects, according to the evaluation, further underscoring the limited penetration of ACF financing into the grain trade business.
The NPA says the low uptake could be linked to high entry barriers or product designs that do not adequately accommodate businesses involved in grain trading.
This suggests that the existing ACF financing model may not be sufficiently responsive to the specific financing requirements and operating conditions of grain traders.
Grain traders, small and medium enterprises, cooperatives and rural aggregators may require financing structures that differ from those suited to crop production.
The disparity is particularly significant because grain trade forms part of the wider agricultural value chain, yet its participation among ACF beneficiaries remains extremely low.
The NPA therefore calls for the ACF to rebalance its subsectoral financing so that the facility reflects the diversity of Uganda’s agricultural economy.
For grain trade specifically, the evaluation recommends identifying the specific barriers limiting participation and redesigning ACF products to better serve SMEs, cooperatives and rural aggregators.
The recommendations come as the ACF continues to record a much stronger concentration in crop farming.
The NPA found that crop farming accounts for 71% of the primary agricultural income sources among beneficiaries, a pattern it says broadly mirrors Uganda’s agricultural economy where crop production remains a major economic activity.
However, the NPA warns that the heavy concentration of ACF support in crop farming could limit the facility’s impact across the wider agricultural sector.
Livestock and poultry, despite attracting substantially less financing, present opportunities for employment, nutrition security, income diversification and faster returns on investment, the evaluation says.
Their relatively low participation could indicate that the current ACF financing model is not sufficiently aligned with the financing needs and operating conditions of businesses in these subsectors.
For livestock and poultry enterprises, the NPA recommends considering smaller loan sizes, shorter repayment periods and tailored risk instruments that better match the characteristics of these businesses.
The proposed changes are intended to widen the range of agricultural activities benefiting from the facility rather than simply increasing the volume of financing going into crop farming.
The NPA argues that a more balanced allocation of ACF financing could help the facility contribute more broadly to food security, employment, income diversification and rural economic development.
The findings also place greater emphasis on the role of product design in determining who benefits from agricultural finance.
While crop farming currently dominates the ACF portfolio, the evaluation suggests that expanding financing to livestock, poultry and grain trade could enable the facility to support more diverse agricultural value chains.
For BoU and participating financial institutions, the challenge will be to maintain the strong financing pipeline for crop production while addressing the barriers that are keeping enterprises in underrepresented agricultural subsectors from accessing ACF credit.
The NPA says such a shift would strengthen the facility’s contribution to the transformation of Uganda’s broader agricultural economy and the development objectives of Vision 2040. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
