1. What is the Agricultural Credit Facility?

The Agricultural Credit Facility (ACF) is a fund set up by the Government of Uganda (GoU) in partnership with Commercial Banks, Micro Deposit- Taking Institutions (MDIs), Credit Institutions & Uganda Development Bank Limited (collectively known as Participating Financial Institutions (PFIs)) to support farmers and projects involved in the agricultural value chain.

2. What is the objective of the Fund?

To promote commercialization of agriculture through the provision of short, medium, and long-term financing to projects engaged in agriculture, grain trade, agro-processing, modernization

and mechanization.

3. Who is providing the financing under the ACF?

The ACF is a risk-sharing Fund between the Government of Uganda and the PFIs. The Government of Uganda contributes 50% to all loans booked by Commercial Banks and the Uganda Development Bank which also contributes 50% and 70% to all loans booked by Microfinance Deposit-taking Institutions and Credit institutions which contribute 30%.

However, for loans booked under the Grain Trade facility, the GoU and PFIs each contribute 50%.

4. Who is eligible to borrow under this Fund?

Individuals, groups, partnerships, companies, and SACCOs (whether small, medium, or large) operating in Uganda and engaged in all agriculture, agro-processing, and grain trade, amongst others.

5. What projects are eligible for financing under the ACF?

Almost all activities along the agricultural value chain including the acquisition of agricultural and agro-processing machinery and equipment, irrigation systems, post-harvest handling and storage facilities, agricultural inputs for farm use such as pesticides and fertilizers, purchase of biological assets (up to a maximum of UGX 80 million) such as banana suckers, fruit seedlings, chicks, piglets, cows and goats for restocking the farm, land opening, infrastructural developments on the farm, among others.

6. Are there any agricultural projects that are not eligible for financing under the ACF?

Yes. Planting of trees, refinancing of existing agricultural loans, purchase of land, and trading in agricultural commodities with the exception other than grain.

7. What are the terms and conditions under the ACF?

i. Loan Amount

The maximum loan amount to a single borrower is UGX 2.1 billion but this amount can be increased on a case-by-case basis for eligible projects that add significant value to the agricultural sector and the economy as a whole.

ii. Loan Term

The minimum loan period is 6 months and the maximum loan period is 8 years with a maximum grace period of 3 years as may be determined by the PFI. The

minimum loan period for Grain trade facilities is 6 months and the maximum is 2 years without a grace period.

iii. Interest Rate 

The interest rate charged by the PFI to the final borrower is capped at 12 % per annum. However, the interest rate for the Grain facility is up to a maximum of 15% per annum.

iv. Facility Fees

Facility fees charged to the client under the ACF should not exceed 0.5% of the total loan amount. However, the borrower is responsible for paying the costs of legal documentation and registration as well as insurance.

8. How can one access the fund?

Eligible borrowers can access loans only through PFIs, which include all Commercial Banks, Licensed Credit Institutions, and Microfinance Deposit-taking Institutions, and Uganda Development Bank Limited. The PFIs are responsible for assessing potential borrowers in line with the Fund’s guidelines and their internal credit policies and thereafter disburse the funds.

9. Can one borrow more than once under the ACF?

Yes.

10. Does one require collateral to access a loan under this Fund?

Yes. Borrowers are expected to provide collateral/ security for the loans as will be determined by the  PFI. However, for loan amounts not exceeding UGX 20 million, alternative forms of collateral may be considered by the PFI under the Block Allocation arrangement.

11. What is the role of the Bank of Uganda in the ACF?

The Bank of Uganda is the Fund Administrator and is responsible for managing the Fund on behalf of the Government of Uganda. BoU is also responsible for processing refinance

claims from the PFIs and sensitizing the public about the availability of financing under the ACF.