Loan Rates Scare Away Acholi Farmers
Lack of security for agricultural loans has remained a major problem for farmers in Acholi sub region.
Majority of the farmers can’t afford modern farm implements such as tractors as their prices machine remain high.
Richard Okumu, a progressive commercial farmer from Parabongo in Amuru district, says that land opening has remained a major challenge to many farmers forcing them to open small plots which are not profitable.
According to Okumu, majority of the farmers are unable lack security or collateral to secure loans from lending institutions.
Besides, Geoffrey Obina, the Amuru District Production Coordinator, noted that there is no bank in Amuru where farmers can go and ask for bank loans for their progress.
In June last year, the 3rd Deputy Prime Minister, General Moses Ali, noted that high interest rates imposed by commercial banks on agricultural loans have remained a challenge to farmers.
Speaking during a workshop for farmers in Gulu, Gen Ali explained that the high interest rates on loans has prevented farmers from progressing since they are unable to borrow money to acquire modern farm equipments.
Interest rates on loans from commercial banks across the country are currently between 29-31 percent.
Norbert Mao, the former Gulu District Chairman, says nine of the ten banks in Gulu are charging farmers 30 percent on the money borrowed and this keeps farmers away.
Geoffrey Akena, the Manager Kasubi- Bardege SACCOs in Bardege Division, Gulu Municipality, noted that majority of farmers who intend to borrow agricultural loans lack security, making it difficult for them to access financial support from financial institutions.
Akena explains that without collateral such as land and other property, no financial institution is ready to give loans to any farmers.