Pearl Capital launches $6m fund to back smallholder farmers in Uganda
Pearl Capital Partners (PCP) has unveiled a credit facility fund totaling $6.4 million, supported by the Netherlands embassy, aimed at providing assistance to smallholder farmers in the dairy and horticulture value chains through a range of access to finance initiatives.
Managed by PCP Uganda Ltd, the Dairy-Horticulture Credit Limited (DHCL Fund) serves as a wholesale lending vehicle for SACCOs, cooperatives, and SMEs collaborating with and aiding smallholder farmers. The DHCL fund is comprised of two distinct credit lines: the Uganda Dairy Credit Facility (UDCF) and the Horticulture Credit Line, each endowed with $3.4 million.
This credit fund will extend efficient medium-term loans to SACCOs and cooperatives operating in Uganda's central, eastern, western, and southern regions, with the aim of facilitating onward lending to smallholder farmers engaged in dairy and horticulture, as well as farmer groups.
Key Takeaways
Agriculture in Uganda accounts for a quarter of GDP and employs 70% of its population – 80% of whom are smallholder and subsistence farmers. Currently, farmers face a difficult financial outlook due to macroeconomic uncertainty, limited market access, and poor reliability of sales from crop harvests. Yields have fallen, and farmers’ incomes are increasingly affected by price hikes of agricultural inputs and extreme weather events. The DHCL fund impact and focus areas will include increased inclusion of women and youth in access to credit, improved technical and governance capabilities of SACCOs to deliver affordable credit to farmers, growth in SACCO membership, and support SACCOs in the development of products that minimize the impact of climate change. The DHCL fund will also seek co-investment opportunities and partnerships with existing similar funds.
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