mechanised-farming

How FRIENDS Consult Assisted Japan International Cooperation Agency’s Agricultural Finance Intervention in Uganda

Introduction

The Japanese International Cooperation Agency (JICA) is a development arm of the Japanese Government and has been active in the development of the Agricultural sector in Uganda for some years. In 2013, JICA wanted to further boost the agricultural sector by providing funding for onward lending to viable agribusinesses, through a ‘two step’ loan approach. The two steps referred to 1) JICA funding financial institutions and 2) financial institutions extending suitable, affordable agribusiness loans to enterprises. FRIENDS Consult was contracted to do the sector diagnostic and make strategic recommendations for intervention.

Key highlights of the project

To address the issue of agricultural finance in Uganda, there was need to focus the diagnostic om two sectors – Agricultural and Financial.  Thus, the assignment covered aspects like:

  1. Agricultural development policy
  2. Farming and rearing practices in Uganda
  3. Typical drivers of demand for agricultural outputs
  4. Supply-side situation and constraints in agriculture
  5. The structure, regulation, and dynamics of the country’s financial sector
  6. Enablers and bottlenecks to agriculture finance in the country
  7. Applicability of JICA’s Two-Step Loan (TSL) model to Uganda
  8. Needed intervention/ action to boost agri-finance

Methodology

Through a combination of institutional and sector assessments, root-cause analysis, document reviews, and key informant interviews for fresh insights, FRIENDS Consult undertook an analysis of agribusiness value chains and respective financial aspects. This led to concrete recommendations that aided JICA in shaping their intervention for impact.

Conclusion

Well-focused sector assessment can be a good tool in focusing development-partner resources for both economic and social impact. The utility of such a service lies in its role in pointing to sector gaps and respective interventions needed.

Article By Keren Obara – Project Officer, FCL

 

 

 

 

 

 

 

FRIENDS Consult