Reflex Eco Group – Uganda News
by Stephen Otage (Local journalist)
Nearly twenty years after Uganda’s cotton sector began crambling, the government has started revamping the sector with the recapitalization of the Uganda development bank.
According to finance minister Maria Kiwanuka, government this financial year increased funding to the bank from $ 40million to $ 200 million and it is aimed at financing farmers’ cooperatives and savings schemes.
Last week, the Uganda Development Bank handed over $174.8million to 2,700 cotton farmers under the Balitwegomba cooperative farmers Cooperative society in the Eastern Uganda district of Luuka. The money is supposed to act as a revolving fund to help the farmers improve on cotton production as well as initiate enterprises using cotton bye-products such as animal cake, cooking oil, lint to supplement income from agriculture.
It is hoped that the fund will help revive cotton growing in the region once famed as Uganda’s industrial hub. Luuka district is found in the Busoga region in Eastern Uganda. Currently, malnutrition is one of the challenges the region is grappling with because of sugar-cane growing which has swallowed up most of the arable land there since it is only sugar-manufacturing factories that have remained active in the region.
According to cooperatives and trade Minister Amelia Kyambadde, government is investing the money in Balitwegomba cooperative farmers’ society as a case study on how to scaleup financing of cooperatives in the country. The cooperative society is owned by a farmers group in Luuka district. It was revived by Mutuma commercial agencies to re-start the defunct Kiyunga Ginnery and Oil Mill in Iganga district which is resumed processing cotton to get products like cotton wool, animal cake, cooking oil and cotton lint.
While launching the fund on Tuesday, UDB executive director Patricia Ojangole, said the loans will attract a 12% interest rate per annum and it will be managed by Opportunity Bank.
‘’ This money we are giving farmers today will attract 12 percent interest rate per annum and we are doing this in line with our objective of promoting national development’’ she said.
Speaking at the hand over, Maria Kiwanuka the minister for finance,planning and economic development asked commercial banks to lower their interest rates on loans designed for agriculture.
‘’ I implore every bank to emulate UDBL in designing agriculture loans with special interest rates lower than those on other products’’ she said.
She added that government is doing every thing possible to ensure that agricultural production is improved because it is the back born of the economy.
According to Ntalo Patrick the farmers’ chairperson, the farmers expect the cash boost to cause a change in the lives of farmers because they have had several NGOs training the farmers on initiatives which have never had impact on them because the trainings were not backed with financial support.
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