Guide / Toolkit
A Comprehensive Guide to Agricultural Loan Product Design for Uganda's Rural Financial Intermediaries
Helping lenders design a product that delivers maximum profit with minimum risk
Download96 pages
This manual addresses the need for effective agricultural loan product design, helping lenders develop a product that is both profitable and sound from a lending risk perspective. Agriculture is a difficult sector to lend to because the lenders understanding of the business is often limited, and information is scarce. The manual explains concepts, and stresses that an effective loan product satisfies both borrowers and lenders needs. Lenders need to maximize profits and minimize risk, while providing the product at an affordable interest rate. With illustrations of rice loans from Uganda, the manual guides lenders through:
- Demand analysis;
- Selection of bankable enterprises;
- Self-analysis of the capacity to supply a loan product;
- Planning product cash flows;
- Risk mitigation;
- Appraising, delivering and recovering agricultural loans;
- Determining product costs and interest rate;
- Product promotion and evaluation.
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