Financial institutions tipped on agriculture credit
Bank of Uganda has called on participating financial institutions responsible for ensuring that the credit facilities under the Agriculture Credit Facility are adequately secured to protect interests of both government and respective participating financial institutions.
The call was sounded by Deputy Governor Bank of Uganda, Michael Atingi-Ego during a one-day agriculture facility workshop organized to sensitize financial institutions about the fund.
He says where the credit facility is for acquisition of machinery and equipment, the primary security for credit facility shall be the machinery and equipment financed where applicable and other marketable securities provided by the borrower if required.
Mr. Atingi-Ego noted that participating financial institutions may seek additional security based on their evaluation of the risk profile of the project being financed.
He added that where an eligible borrower applies for a credit facility of up to twenty million shillings or less but does not have the requisite collateral or marketable securities to secure such facility, financial institutions’ alternative collateral such as bank statements can be considered.
He says others to be considered are bank ratings, business cash flow, and financial track record in place of the requirement for security or in addition to the available collateral or marketable securities.
