Pearl Capital Partners Launches $6.4 Million Credit Facility Fund to Aid Smallholder Farmers in Uganda
Pearl Capital Partners (PCP) has introduced a credit facility fund totaling $6.4 million, with support from the Netherlands embassy. This fund is designed to provide crucial assistance to smallholder farmers in the dairy and horticulture value chains through various access-to-finance initiatives.
Key Details:
- Objective of DHCL Fund:
- Managed by PCP Uganda Ltd, the Dairy-Horticulture Credit Limited (DHCL) Fund serves as a wholesale lending platform for SACCOs, cooperatives, and SMEs working with and supporting smallholder farmers.
- Composition of DHCL Fund:
- The DHCL Fund consists of two distinct credit lines: the Uganda Dairy Credit Facility (UDCF) and the Horticulture Credit Line, each endowed with $3.4 million.
- Target Areas:
- The credit fund will provide medium-term loans to SACCOs and cooperatives operating in various regions of Uganda, including central, eastern, western, and southern areas. The aim is to facilitate onward lending to smallholder farmers engaged in dairy and horticulture, as well as farmer groups.
- Challenges Faced by Farmers:
- Agriculture in Uganda constitutes a significant portion of GDP and employs a large percentage of the population, particularly smallholder and subsistence farmers. However, these farmers face challenges like macroeconomic uncertainty, limited market access, unreliable sales from crop harvests, reduced yields, and the impact of climate change.
- Impact and Focus Areas:
- The DHCL fund aims to enhance the inclusion of women and youth in accessing credit, strengthen the technical and governance capacities of SACCOs for delivering affordable credit, increase SACCO membership, and support the development of products that mitigate climate change effects.
- Co-Investment and Partnerships:
- The DHCL Fund will explore opportunities for co-investment and partnerships with existing funds with similar objectives.
Conclusion:
The launch of the Dairy-Horticulture Credit Limited (DHCL) Fund by Pearl Capital Partners, supported by the Netherlands embassy, is a significant step towards providing vital financial assistance to smallholder farmers in Uganda. By addressing key challenges faced by farmers and focusing on inclusivity, technical capabilities, and climate resilience, this fund aims to make a positive impact on agriculture in the region.