REVEALED! Secrets why activists want Post bank turned into Agric & Cooperative bank

Post bank's Ndeeba branch

Post bank’s Ndeeba branch

By Moses Oketayot

Ltd (Rtd) Mugisha Moses Magufuri, currently working as the procurement and seed monitoring officer at the Operation Wealth Creation Secretariat together with Byamugisha Amid Kigongo, a farmer from Ntungamo district wants the government to transform Post Bank into an agricultural and cooperatives Bank.

Through a letter written to the Operation Wealth Creation Coordinator Gen. Salim Saleh that was received on 7th September 2022, they opine there is a missing link that affects people engaged in Agriculture i.e. the absence of a robust agricultural financing in the general national development strategy.

The activists also opine that transforming Post Bank into an Agricultural and Cooperatives Bank will ease access of cheap capital to farmers with lower interest rates as compared to the current interest rates being offered by commercial banks in the country to farmers.

Magufuri and Byamugisha say that having an agricultural bank in place can also act as a pool of funding for all the government initiatives like the Parish Development Model (PDM), Emyooga, OWC, and Youth Livelihood Fund among other government community development projects.

They also say that through research there is a lot of mishandling of government funds through NAADS, Micro finance, Agricultural Facility Fund, PDM among others which can be managed well if there was an agricultural and cooperative bank in place that would offer lower interest rates of 6-7% to support agricultural production.

They now want the government to create an agricultural bank by a vote of parliament so that agriculture that employs 65% of the population can become attractive to the young population to join the sector.

One farmer whom we talked to on grounds of anonymity said that other commercial banks are not agro-specific, and borrowing from banks for agricultural projects is expensive in the short run, because the banks expect repayment before the farmer gets their first harvest which he says is unfair.

The activists also believe that with a farmers’ and cooperative bank in place, value addition in the agriculture value chain will improve and more people will get employed thus improving people’s standards of living and the economy as a whole.
An economist whom we spoke to said that what the activists are opting for is not sustainable because the banking sector is dominated by foreign banks, and transforming Post Bank into an agriculture and cooperative bank will not be any different from what Uganda Development Bank is currently doing.

In Africa, there are countries that have agricultural and cooperative commercial banks and they include Kenya, Nigeria, Egypt, Liberia, and Burkina Faso among others.



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