Based on the latest UN Population Division estimates and Countries in the world by population (2025), Uganda ranks 31 with a growth rate of 2.74% out of the 233 countries which should be a point of concern, hunger and food insecurity remain significant challenges with a rapidly growing population outpacing food production.
As a way of counteracting this phenomenon, there is a tendency to increase food production through conventional means to meet the food needs of the increasing population without necessarily focusing on practices that conserve agricultural resources. The impact of this on the environment is becoming disastrous to the overall development and human life. As a matter of fact, mother nature is becoming more furious than ever before and ravaging all over with unprecedented natural disasters and the prevalent heavy toll on human life.
As a corrective measure, a number of development partners like KRC-Uganda with the support of HUMUNDI Belgium among others like BD and IDP are fronting an alternative Agricultural approach. Agroecology is a transformative approach to agriculture, integrating principles of ecology into farming systems to promote sustainable and resilient food production. In contrast to the conventional agriculture, agroecology not only enhances agricultural productivity but also reinforces environmental sustainability, biodiversity, nutrition and healthy foods as well as socioeconomic equity.
With this agroecological transition, there are key challenges ranging from inadequate knowledge and skills on business development by the farmer households and the corporate entrepreneurs, poor market structures and limited financial/business investment support.
This article focusses only on the limited financial support aspect, highlighting the steps taken to overcome this challenge in the Rwenzori region;
Traditional financial institutions have until now remained hesitant to provide loans to smallholder farmers due to factors like small loan sizes, lack of collateral, and perceived high risk is common. KRC-Uganda’s program of increasing access and inclusion of the small holder farmers into the Microfinance and Market Systems is facilitating the access to loans to accelerate agroecological transition.
Towards the end of 2024, SACCOs under the program were encouraged to develop agroecological loan products as well as set aside a portion of their loan portfolios as a special loan fund for agroecology transition. The loan fund is advanced to the members engaged in agroecological production and value addition businesses including the production, purchase or sale of organic manure including the bio rations, purchase of or trade in especially small animals like rabbits, goats, pigs and apiary business, poultry business, trade in animal products, production, purchase or sale of clean energy or energy saving technologies like solar kits, briquettes, fuel saving cooking stoves and tree planting (afforestation and re-afforestation) initiatives.
In the long-run, the current set aside agroecology loan fund by the SACCOs under the project is expected to grow into a sustainable agroecological financing facility to serve a wider population, thus facilitating agroecological transition in the region and beyond.
Poultry in Kikongo Thuwathikanaye Farmers SACCO, Kasese district.
Article written by Mugisa Jared, Microfinance and Agribusiness Manager
