Farmers to revive cooperative bank 

After a long push and pull between farmers and government over the formation of a cooperative bank, farmers are now working on modalities that will ensure that the bank is formed in the near future.

Under their umbrella body National Alliance of Agricultural Cooperative in Uganda (NAAC), the farmers have resolved to start a microfinance facility that will evolve into a bank.

Mr Geoffrey Emmy Sayekwo, the outgoing chairperson at NAAC said the microfinance which is likely to be launched before the end of the year will be responsible for marketing and extending credit facilities to farmers.

“We are moving away from an organisation that relies on donor funding; while we start as a microfinance and going forward we aim at forming a bank, the government seems not to be in a hurry to form one,” he said.

Mr Sayekwo explained that NAAC has more than 30,000 members who are willing to contribute Shs5b to start a microfinance as agreed in the annual general meeting (AGM).

During the AGM held this week, NAAC’s 39 member cooperatives representatives from across the country endorsed the development saying the high interest rates by commercial banks is not favourable to farmers.  

Last year while presenting the status of implementation of the 2021-2026 NRM manifesto commitments, Mr Amos Lugoloobi, minister of State for Finance said the study to establish a full-fledged National Farmers’ Bank is ongoing.

He explained that the government continues to provide funding to farmers through the Agricultural Credit Facility (ACF) managed by Bank of Uganda. 

However, Mr Sayekwo said he once represented the cooperative movement at the Parliament’s Committee on Commissions, Statutory Authorities, and State Enterprises (Cosase) six years ago but nothing has happened.

“If the challenges and bureaucracy can take six years, it is time farmers woke up and started their own source of credit,” he said.

Mr Sayekwo also said the ACF is not working because it is unclear to farmers and the banks are using farmers’ ignorance to charge a higher interest rate.

Task ahead
“Microfinance formation is my priority, then ensuring that farmers get improved farm inputs to increase production, availing the market and farmers get good returns,” said Mr Ayubu Wesige the new chairperson of NAAC.

Creation of NAAC was prompted by the need for agricultural cooperatives to have a national organisation at their disposal in order to better amplify their voice.

Mr Wesige said the directives given by the government on ACF are different from what banks tell farmers to do.

“We tried it at Doho Irrigation Scheme, the interest these commercial banks charge is above what is stipulated,” he said.