Stanbic Bank Uganda Ltd was declared the best performing Commercial Bank in disseminating the Government of Uganda funded Agricultural Credit Facility (ACF) by Bank of Uganda at a ceremony that was held at Sheraton Kampala Hotel on Thursday.
Stanbic shed off resistance from DFCU Bank and Uganda Development Bank Limited at an awards ceremony whose purpose is to recognise the efforts of the Participating Financial Institutions (PFIs) in advancing the scheme objectives.
The Agricultural Credit Facility as explicitly stated in the budget speech for financial year 2009/2010 was primarily set out to support mechanization of agriculture and boosting agro-processing through facilitating the acquisition of the requisite machinery and equipment.
Government of Uganda owned Post Bank Uganda Limited was announced winners of the best-performing Credit Institutions category also popularly known as the Tier 2 banking institutions. Opportunity Bank came second while Mercantile Bank was third.
On the night, Post Bank swept the most awards, running away with the winners’ prizes on five occasions. They won the categories of Number of loan applications, Number of loans disbursed as a percentage of total number loans disbursed, Number of loans disbursed to small borrowers, Regional outreach and Overall Best Performing PFI (CI or MDI category).
The two other categories of Value of loans disbursed and Document perfection and completeness were won by DFCU Bank and Stanbic Bank Uganda Ltd respectively.
Dr Louis Kasekende, the Bank of Uganda Deputy Governor said the primary beneficiary for the Agricultural Credit Facility are the medium to large scale commercial farmer, adding that it is critical in assessing its performance.
“Often whenever Governor and I, interact with various segments of the country’s political and business class, a common thread is that the ACF is not working and is inaccessible for the majority of farmers.
“This is far from the truth and tonight presents an opportunity to set the record straight. Given the objectives I have enumerated, the ACF is performing well in line with those set objectives and I shall expound on this further,” noted Kasekende.
He said they need to assess the ACF from the perspective of the objective owner, the government of Uganda.
“The Ministry of Finance, Planning and Economic Development routinely assesses the performance of all programmes in the agriculture sector looking at performance targets and objectives, inputs and outputs and attainment of outcomes for the programmes.
“In the MoFPED’s report issued in April 2019 assessing the performance of the programmes as at December 2018; the ACF was rated at a score of 76.2 per cent compared to the overall agriculture sector rating of 61.8 per cent.
“In fact, only the Uganda Coffee Development Authority (UCDA) attained a higher score. The many good stories of the firms and farms that have been expanded in terms of size and output and whose productivity has improved are a testament to the impact of the ACF,” stressed Kasekende.
He added that the scheme’s performance can also be assessed with respect to the quality of project viability assessment, which in his view, will be reflected in the quality of the loan portfolio.
“As at December 2018, the ACF had a low non-performing loans (NPL) ratio of about 1 per cent, compared to 6.9 per cent for the overall agricultural loan portfolio of the banking sector as a whole,” said Kasekende.
Uganda’s Finance Minister Matia Kasaija, who was the chief guest, said agriculture and its transformation play a critical and important role in helping the Government deal with economic growth, unemployment, and rapid urbanization.
“I encourage our Financial Services Providers (FSPs) to be proactive and engage with the agricultural value chain to identify business opportunities.
“As the competition intensifies in the financial services sector partly driven by technological innovations, success will come to those who tap into sectors with the high turnovers. Agriculture despite its risky nature is one of those sectors,” said Kasaija.
BY PAUL TENTENA