A Strategy to Improve the Agricultural Loan Portfolio in Finance Trust Bank

This study investigated the decline in the agricultural loan portfolio of Finance Trust Bank and strategies to reverse this trend. The research objectives included identifying factors contributing to the decrease in the agricultural loan portfolio of Finance Trust Bank and exploring suitable strategies for its improvement. The study adopted an exploratory research design and qualitative methodology, the study population included departmental heads, loan officers, and agricultural loan clients who were selected through purposive sampling, data was collected using semi-structured interview and analyzed using content analysis. Key findings from the analysis revealed various factors contributing to the decline in the agricultural loan portfolio, including high risks in agriculture, stringent borrowing conditions, lack of staff skills, delays in loan processing, high cost of loan processing, delays in loan processing, too much paper work, few loan officers, untimely disbursement of loans, competition from other banks among others. Additionally, the study identified strategies to increase the loan portfolio, such as training loan officers, segregating duties, improving staff salaries, simplifying loan requirements, use of guarantee schemes, monitoring loans, reducing interest rates, promoting value chain among others. The study evaluated these options basing on their pros and cons, ultimately selecting the most viable strategies which included improving loan officer salaries, extensive marketing of agricultural loan products, monitoring loans and scaling down loan requirements. The study also developed an implementation plan of the selected options for improving the agricultural loan portfolio, the implementation plan highlighted the execution activities, responsible persons, costs, timelines, challenges and potential problems during implementation and the mitigation measures. The study acknowledged limitations, such as the absence of input from Bank of Uganda officials and the context-specific nature of the findings. The study recommended conducting similar studies with a larger sample size and involving other commercial banks in Uganda. In reflections, the study highlights the importance of strategic policy development, improving working methods, and personal development for addressing challenges in agricultural lending. These insights contribute to addressing the operational knowledge gap in Finance Trust Bank and offer valuable implications for enhancing agricultural loan portfolios in similar contexts.