Uganda's Smallholder Credit Fund Reaches US$9.3M After Netherlands's US$2.3M Commitment

Edward Isingoma Matsiko, Pearl Capital Partners Managing Partner

The Netherlands has committed an additional US$2.3 million to Uganda’s Smallholder Credit Fund, bringing its total capitalization to US$9.3 million in 2026. Managed by Pearl Capital Partners, the fund will provide credit lines to SACCOs and working capital to farmer cooperatives, focusing on Uganda’s livestock and agri-food sectors.

How Is the Netherlands Supporting Uganda’s Agricultural Finance Sector?

The Embassy of the Kingdom of the Netherlands in Uganda has committed an additional US$2.3 million (€2 million) to the Smallholder Credit Fund, strengthening access to finance for smallholder farmers and agricultural organizations in Uganda.

The new commitment brings the fund’s total capitalization to about US$9.3 million (€8 million), providing additional lending capacity to organizations that serve farmers across Uganda’s agricultural economy.

The investment reflects the Netherlands’ continued focus on sustainable agricultural development and improving access to finance for grassroots agricultural businesses and producer organizations.

Who Manages Uganda’s Smallholder Credit Fund?

The Smallholder Credit Fund is managed by Pearl Capital Partners, an investment firm focused on financing businesses and organizations within Africa’s agricultural sector.

The fund was previously known as Dairy-Horticulture Credit Limited before being rebranded as the Smallholder Credit Fund. The new name reflects its expanded mandate beyond dairy and horticulture and its broader focus on Uganda’s smallholder agricultural economy.

Following the latest €2 million commitment, the fund now has €8 million in total capitalization.

Fund Detail	Current Position
New Netherlands commitment	€2 million
Total fund capitalization	€8 million
Fund manager	Pearl Capital Partners
Previous name	Dairy-Horticulture Credit Limited
Primary market	Uganda
Target beneficiaries	Smallholder farmers and agricultural organizations

How Will the €8 Million Fund Support Farmers?

The Smallholder Credit Fund will channel financing through two principal mechanisms:

• Medium-term credit lines: Financing will be provided to Savings and Credit Cooperative Organizations (SACCOs), enabling them to expand lending to local farmers over medium-term periods.
• Working capital facilities: Financing will be extended to farmer cooperatives to support day-to-day operations, input purchases and seasonal cash-flow requirements.

This structure uses an onward-lending model, meaning the fund does not rely solely on direct lending to individual farmers. Instead, it strengthens the financial capacity of organizations that already serve farming communities, allowing capital to reach a larger number of smallholder producers.

Which Agricultural Sectors Will Receive the Financing?

The fund is primarily focused on two areas of Uganda’s agricultural economy:

1. Livestock, supporting agricultural organizations and farmers operating across the livestock value chain.
2. Agri-food, helping producer organizations and businesses access working capital and financing for agricultural activities.

By targeting SACCOs and cooperatives, the fund aims to address financing constraints at the community level while strengthening the organizations that connect farmers to capital.

What Could the Smallholder Credit Fund Mean for Uganda’s Agricultural Economy?

The additional €2 million increases the Smallholder Credit Fund’s capitalization by 33.3%, from €6 million to €8 million. This provides greater capacity to extend financing to agricultural organizations and, through onward lending, to smallholder farmers.

Improved access to credit and working capital can help farmers and cooperatives finance inputs, manage seasonal liquidity pressures and maintain agricultural operations. In turn, the initiative is intended to support productivity, food security and economic activity across Uganda’s farming communities.

The Netherlands’ latest commitment therefore expands more than the fund’s balance sheet: it strengthens an existing financing channel designed to move institutional capital into Uganda’s smallholder agricultural economy.

 

 

FAQs

1. What is the Smallholder Credit Fund?
The Smallholder Credit Fund is an agricultural finance vehicle in Uganda that provides financing through SACCOs and farmer cooperatives to improve access to capital for smallholder farmers and agricultural organizations.

2. How much has the Netherlands committed to the Smallholder Credit Fund?
The Embassy of the Kingdom of the Netherlands in Uganda has committed an additional €2 million to the fund in 2026. This brings the fund’s total capitalization to €8 million.

3. Who manages the Smallholder Credit Fund?
The fund is managed by Pearl Capital Partners, an investment firm focused on agricultural and agribusiness financing in Africa.

4. Which sectors does the fund target?
The Smallholder Credit Fund focuses primarily on Uganda’s livestock and agri-food sectors, providing financing through SACCOs and farmer cooperatives.

5. How will the fund’s financing reach farmers?
The fund uses an onward-lending model. It provides medium-term credit lines to SACCOs and working capital facilities to farmer cooperatives, which can then extend financing and financial services to smallholder farmers.