Kampala — Uganda's government has been challenged to institute rural development banks that will focus on agriculture financing.
According to the study that was carried out by the Economic Policy Research Centre (EPRC) on the Access and utilization of credit in Uganda, Unlocking the Dilemma of Financing Smallholder farmers, although government has tried to come up with agriculture financing, such initiatives have not yielded any strong positive results.
It says that when it comes to the desired improvement in access to credit by small holders, the policy and institutional coordination's limit the chances of farmers to transform the agricultural sector.
"The government has instituted a number of agriculture financing initiatives like Entandikwa (an agricultural credit scheme).
"All these programs were aimed at supporting farmers particularly the smallholder ones but none of these initiatives have yielded positive result. The government should come up with specific rural banks," said Mr. Ezra Munyambonera, an economic researcher at EPRC.
The poor performance of such initiatives that were instituted by the government according to the researcher was poor effective institutional coordination, poor monitoring and implementation.
He added that the inadequacy of funding to cover agricultural production to the commercial oriented farmers in the case of the Agriculture Credit Fund and, the National Agricultural Advisory Services failure to put any credit provision to majority of the farmers are also to blame.