Agriculture remains one of the key sectors supporting Uganda’s economic growth trajectory and creating jobs and related opportunities.
Financial sector players, especially banks, continue to extend credit through the government-backed agriculture credit facility (ACF) and other lines of credit targeting organized, commercial farmers.
For instance, the recently released financial results for Stanbic Uganda Holdings Limited (SUHL) indicate that a total of Shs 467 billion in loans and credit went to agriculture (including
crops, livestock, poultry) fishing and forestry, targeting individual farmers, cooperatives, large-scale plantation owners, farm suppliers, and other stakeholders.
In 2021, the bank lent out (loan book) a total of Shs 3.7 trillion compared to Shs 3.6 trillion the previous year. This loan book saw the bank maintain a 23.3 per cent industry market share. ACF facilitates the provision of medium and long-term financing to projects engaged in agriculture and agro-processing, focusing mainly on commercialization and value-addition.
Anne Juuko, the Stanbic bank chief executive, said the bank will continue to support the expansion of grain storage and processing facilities for key industry players in the formal grain trade.
“The bank plays a significant role in the agricultural production chain by helping to finance processes that ensure higher value is gained from the crops and animal products produced and consequently increasing Uganda’s export earnings,” Juuko said.
Agriculture is a key sector in Uganda’s economy, employing approximately 69 per cent of the population and contributing about 25 per cent to the country’s gross domestic product, according to official estimates. Agriculture products account for 73 per cent of all our export earnings and a third of Uganda’s annual foreign exchange inflows. Beyond agriculture, the bank has been making strategic interventions in key sectors such as tourism, minerals, oil and gas, and infrastructure.
It lent Shs 290 billion to the trade sector, which is the second highest employer in Uganda. Stanbic’s financial position remained strong in 2021 with the capital adequacy ratio, which measures the ability of a bank to meet its obligations by comparing its capital to its assets, improving from 18 per cent to 21.9 per cent.
In a statement, Stanbic said: “As was the case in the previous year, 2021 was equally challenging especially during the first three quarters when the Covid-19 pandemic worsened, forcing the economy into another lengthy lockdown that affected several business activities across the country... Notwithstanding these headwinds, Stanbic managed to post resilient results albeit slower growth in some areas. Our performance remains largely driven by the bank, but we are confident in the other subsidiaries to registering good return on investment.”