Central Bank pushes banks to improve access to agricultural and SME financing

The Bank of Uganda has intensified efforts to expand access to affordable credit for farmers and small businesses, even as concerns emerge over barriers faced by potential borrowers.

Speaking through Hannington Wasswa, Director Commercial Banking, the Deputy Governor, Dr Augustus Nuwagaba, called on financial institutions to strengthen responsiveness to clients under government-backed credit schemes.

This was during a workshop aimed at improving the implementation of the Agricultural Credit Facility (ACF) and the Small Business Fund (SBF).

At the event, banks including Pearl Bank and Opportunity Bank were recognised for their quick response to customers applying for the schemes, an approach regulators say should become standard across the sector.

Latest data shows that as of March 2026, at least 13,000 borrowers had accessed Shs 1.4 trillion under the ACF, while 3,260 small businesses received Shs 70 billion through the SBF. The two facilities are key government interventions designed to unlock financing for agriculture and micro, small and medium enterprises (MSMEs), sectors widely regarded as the backbone of Uganda’s economy.

However, the central bank warned that progress is being undermined by persistent complaints from the public.

“We have registered an increase in complaints that some banks are discouraging potential borrowers. This is not merely a reputational concern; it represents a real barrier to financial inclusion, economic opportunity, and transformational growth,” the Deputy Governor said.

The remarks highlight a growing tension between policy intent and implementation, with authorities concerned that restrictive lending practices could limit the impact of subsidised credit programmes.

Agriculture remains a priority sector, employing the majority of Ugandans but historically constrained by limited access to affordable financing. Similarly, small businesses continue to face high borrowing costs and stringent collateral requirements, limiting their ability to scale.

Officials say continuous engagement with financial institutions will be critical in addressing these bottlenecks. The workshop, part of ongoing dialogue between regulators and lenders, is expected to reinforce accountability and improve service delivery under the credit schemes.

The Deputy Governor emphasised that such engagements are intended to “reaffirm commitment to our shared responsibility to ensure that affordable and accessible financing reaches the sectors that drive our economy, particularly agriculture and small and medium-sized enterprises.”

With Uganda pursuing inclusive growth, the effectiveness of programmes like the ACF and SBF is likely to play a decisive role in boosting productivity, supporting rural incomes, and accelerating private sector development.