As Uganda works to accelerate agricultural commercialisation, technology is helping financial institutions better understand farming businesses and expand access to finance.
Speaking at the French Week Business Forum at the Uganda Business Facilitation Centre, Mercy Iselu, Sector Head for Food and Agriculture at dfcu Bank, said advances in technology are giving financial institutions greater visibility into agricultural enterprises, allowing banks to better understand production cycles, cash flows and business performance.
According to her, digital transaction records and other data sources are helping lenders make more informed credit decisions and extend financing based on demonstrated business activity rather than limited historical records.
She explained that better-quality data gives lenders stronger evidence of income patterns and repayment capacity, making it possible to structure credit around the realities of an agricultural business.
“If the bank is satisfied with the data available, it creates trust by providing verifiable evidence of a farmer’s income.”
This shift is taking place as Uganda confronts the wider challenge of structural economic transformation. The 2024 National Population and Housing Census indicates that 33.1% of households remain in the subsistence economy, while 66.9% operate in the money economy, underscoring the scale of commercialisation needed to raise productivity and household incomes.
Iselu cautioned, however, that improved data alone will not unlock the sector’s full potential. Agricultural finance is still largely designed around seasonal production, yet commercial growth also depends on patient capital for productive assets and infrastructure.
“Most of the financing available is based on the season. But if financial institutions want to transform the sector, there is a need for long-term financing,” she said.
Farmers need capital not only for short-term inputs, but also for machinery, irrigation systems, solar-powered equipment and post-harvest infrastructure. Financing these investments will require closer collaboration among banks, equipment suppliers, technology providers, agricultural insurers and other value-chain actors.
Iselu added that digital tools cannot close the financing gap on their own. Applications may help farmers identify crop diseases, production constraints or operational inefficiencies, but many farmers still lack the affordable capital required to act on that information.
“The biggest disconnect is therefore affordability and access to finance,” she said.
Dr. Sam Mugume, Acting Commissioner for Macroeconomic Policy at the Ministry of Finance, Planning and Economic Development, said agriculture remains central to Uganda’s economic transformation because of its contribution to employment, production and household incomes.
He said significantly increasing productivity is essential if the country is to achieve its long-term development ambitions. Digital financing can widen access to capital, while public investment in rural roads, irrigation and other enabling infrastructure can lower the risk associated with agricultural lending.
Dr. Mugume called for a shift from financing farmers in isolation to supporting entire agricultural value chains. Such an approach would connect farmers, processors, equipment suppliers, insurers, transporters and markets within a more coordinated financing structure.
He said public financing should prioritise the enabling environment needed to attract private capital, particularly into mechanisation and irrigation, while stronger public-private partnerships address the structural barriers that continue to constrain productivity.
The forum’s discussion showed that data-driven lending can improve how agricultural businesses are assessed, but durable transformation will depend on combining technology with affordable long-term finance, productive infrastructure and partnerships that strengthen entire value chains.
