Sowing hope with soft loans: How smallholder farmers are thriving with AFRICE’s soft loan initiative

In the quiet landscapes of Kikarara village in Rukungiri district, along Queen Elizabeth National Park, 35-year-old Goretti Karungi bends over her maize and beans garden with her hands moving rhythmically as she weeds. The scorching sun beats her down on her back but her spirit is unbroken.  For years, Karungi struggled to keep her small garden productive but lack of financial support made every planting season a struggle.

Since September last year, things have changed after receiving a soft loan of 1.5 million from African Institute for Culture and Ecology (AFRICE). Karungi has expanded her garden. The loan, with friendly interest of 2%, has given her a fresh start.

“I tried to secure loan from the bank but they wanted a land title as security which I don’t have. The land I use is in the names of my husband.  But AFRICE believed in me and gave me a loan without security. Now, my harvests are improving, and I am able to pay school fees for my children. Karungi is one of the 35 smallholder farmers across Rukungiri, Buliisa and Rwampara districts who have received soft loans ranging from 500,000 shillings to 15 million shillings under AFRICE’s Agriculture Impact Investment Initiative, funded by the Mortenson Family Foundation.

Figure 1: Karungi in her garden

In Rwampara District, Naboth Mugisha, a member of Bakashoba Farmers’ Cooperative shares a similar story of transformation. The cooperative, which brings together 25 smallholder farmers, secured a 15 million loan from AFRICE last year.

With this funding, the farmers are not just growing coffee and bananas; they are now moving into processing, a leap that will significantly increase their earnings.

“Before AFRICE supported us, we were selling raw coffee beans at low process,” explains Mugisha. But with this support, we are setting up a small-scale coffee processing plant, which means better prices and more value for our produce. This is a big step for our families and community,” he added.

Agriculture is the backbone of Uganda’s economy, employing over 70% of the population yet it faces serious hurdles. Limited access to finances, unpredictable weather patterns linked to climate change disrupts planting cycles. Over reliance on chemical inputs degrades soils while oil and gas exploration in areas like Buliisa district threatens land use and food security.

AFRICE’s initiative is changing this narrative by focusing on indigenous seed varieties, sustainable farming practices and financial inclusion. Unlike commercial loans which are often out of reach for rural farmers, AFRICE’s revolving loan fund is tailored to their needs, ensuring flexibility and affordability.

“Most of our farmers are hardworking but financially excluded,” said Denis Tabaro, AFRICE’s Executive Director. “Through this initiative, we are proving that with financial and technical support, farmers can scale up production, improve their incomes and build their resilience against climate change.”

This model is yielding results.  Farmers like Karungi are seeing improved harvests. Cooperatives like Bakashoba are scaling into value addition.

For Karungi, the loan means more than just money; it represents dignity and hope. “When the harvest comes in, I contribute to the savings group in my village and help others,” she says proudly. “Women are always the last to be considered because they have no property to give to banks as security, but AFRICE has shown us that we matter,” she added.

AFRICE’s Agriculture Impact Investment Initiative aligns closely with Uganda’s Parish Development Model program, which seeks to eradicate poverty by building wealth at the household level. It also contributes directly to the United Nations Sustainable Development Goals (SDGs), particularly SDG1- No poverty and SDG2- Zero Hunger.

While the initiative has supported 35 farmers so far, the need is overwhelming. Many more farmers remain without access to affordable credit and technical training.  In Uganda, 46% households are food insecure as per the Uganda Population Census report 2024. This means more support is needed.

As Karungi puts it, “If more farmers like me could get this kind of support, our villages would not suffer hunger again.”

Scaling up this model requires more funding and partnerships. AFRICE is calling on development partners to investing in expanding the soft loan schemes, promoting sustainable farming practices and indigenous seeds.

As Uganda works towards hunger-free and prosperous future, the stories of farmers like Karungi and Cooperatives like Bakashoba prove that small investments can yield big transformations. With the right support, smallholder farmers are not just feeding their families; they are feeding the nation.

By admin

ENDS//