Traditional Obstacles in Agricultural Financing
Access to finance remains a significant hurdle for smallholder and entrepreneurial horticulture farmers in Uganda. High interest rates, complex bureaucracies, lack of collateral, and inadequate financial records create formidable barriers. Financial institutions often view farmers as high-risk borrowers due to unpredictable income streams, vulnerability to climate shocks, and limited assets. Consequently, many farmers resort to informal lenders with exorbitant interest rates, trapping them in cycles of debt and hindering their ability to expand productivity. This financial exclusion impacts rural incomes and perpetuates poverty, stifling opportunities for growth and innovation in the sector.
Partnership to Address the Funding Gap
Recognizing these challenges, the Horticulture Market Acceleration Project (HortiMAP) joined forces with Pearl Capital Partners (PCP Uganda Ltd), a licensed Fund Manager and Investment Advisor, to unlock financing opportunities for horticulture farmers across Uganda’s Central, Eastern, and Southwestern regions. This collaboration was rooted in a thorough feasibility analysis of the sector’s funding landscape, which identified Savings and Credit Cooperative Organizations (SACCOs) as key channels for reaching farmersgiven their community-based, member-focused approach that is trusted by rural farmers, however, they often lack the capacity and resources to meet the sector’s growing credit demands effectively.
Tailored Financial Solutions
To bridge this gap, TechnoServe and PCP co-created a specialized loan product designed to meet the distinct needs of horticulture farmers. This innovative financial package supports critical activities along the entire value chain, including purchasing quality inputs like seeds and herbicides, investing in mini-irrigation, storage facilities, and post-harvest technologies. The product is adaptable to different crop types, farm sizes, and regional conditions, ensuring relevance and effectiveness.
The partnership selected 33 SACCOs to pilot this initiative, providing them with rigorous capacity-building in risk management, institutional strengthening, and product development. This hands-on mentorship enhanced their operational frameworks and enabled them to deliver more responsive financial services.
Scaling Impact through Targeted Interventions
In 2022, PCP launched the Horticulture Credit Line (HCL), an agro-focused credit line supported by the Embassy of the Kingdom of the Netherlands. The HCL aimed to serve 12,000 smallholder farmers, offering medium-term loans through SACCOs, cooperatives, and farmer organizations tailored specifically to horticulture needs.
Over the past two years, TechnoServe expanded its support by providing technical assistance to 60 additional cooperatives, preparing them to participate in the HCL program. Farmers received training in climate-smart and agronomic practices, boosting their capacity to invest confidently in their farms. As a result, all 33 pilot SACCOs integrated the HCL into their product offerings, disbursing loans to over 6,500 farmers—comprising 2,863 women and 1,320 youth—totalling UGX 6.63 billion (USD 1,816,438).
Future Directions
Despite notable achievements, challenges remain. Plans include refining the HCL product to incorporate climate change considerations and strengthen market linkages. PCP is working with other projects to enhance technical support through the entire loan cycle—application, utilization, and monitoring. Additionally, peer-to-peer learning initiatives and more customized financial products are on the horizon to meet the evolving needs of farmers and SACCOs. The success of this collaboration hinges on shared principles of transparency, participatory decision-making, and joint monitoring. Both TechnoServe and PCP have committed to a forward-looking approach focused on delivering quality results and sustainable impact. Their partnership exemplifies how aligning values and operational philosophies can foster effective, scalable solutions.