Farmers Damn High Interest Rates on Bank CommercialLoans

High interest rates and unfair treatment are said to be the major limitations to acquiring of commercial loans from banks as stated by farmers in the Lango Sub region

Several farmers who have now formed an association; Lira City Farmers’ Adoption Group argue that although many commercial banks are rallying them to go for loans to boost their commercial farming, the interest rates imposed on the loans makes it hard for them to pay back.

The chairperson of Lira City Farmers’ Adoption Group, Geoffrey Obia, states that bankers take advantage of ignorance amongst the farming communities and the absence of records to persuade them into taking money and eventually take much more from them.

Obia added that farmers who pick up the money are forced to sell off their products at a giveaway price in order to service the loans.

A secondary school teacher ,Paska Atim,who abandoned the classroom to venture into farming says she resorted to borrowing from Village Saving and Loan Associations after failing to secure a loan from the bank.

How ever, Joseph Ebong, a mushroom farmer in Lira City believes that different banks have their own terms and conditions for the loans which the farmers must adhere to if they need the loans.

The area leader, Ziegler Ojede Bobson, an area leader argued that aside from the high-interest rate, banks also take longer to process the loans which may interfere with the farmers’ intentions. He wants the Central Bank to consider regulating interest rates for bank loans given to farmers.

Although, Stephen Luwaga, the manager of the Post Bank Lira Branch explains that the agricultural loans are given based on the farmers’ capacity, credit history and agricultural experience saying the bank would only be safeguarding public funds.

But according to Luwaga, farmers are still coming for loans especially during this planting season despite the many raised complaints.

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