louis kasekende : shaping the future of smallholder financing in uganda keynote address by dr louis kasekende, deputy governor of the bank of uganda, at the high - level meeting on “ developing approaches for financing smallholder household in uganda ”, kampala, 20 april 2016. * * * good morning ladies and gentlemen. i would like to thank the organisers of this high level meeting, the uganda agribusiness alliance, for inviting me to give a keynote address. the modernisation of agriculture is probably the most important developmental challenge facing uganda ; without agricultural modernisation it is very difficult to envisage how uganda ’ s economy will ever be able to achieve middle income status. the vast majority of farmers in uganda are smallholders and they produce almost all of the country ’ s agricultural output. ninety six percent of total farm output in uganda is produced on farms of five hectares or less in size. there is no feasible route to agricultural modernisation which does not place the smallholder at its centre. although ugandans often perceive themselves as “ blessed by nature ” our agricultural performance has been poor for several decades. aggregate output growth has been weak and the growth that has occurred has largely been the result of increases in land acreage under cultivation and increases in the agricultural labour force. both average land and labour productivity have been stagnant for decades. the 2012 / 13 uganda national household survey indicated that two thirds of farmers are classified as subsistence farmers. an earlier survey found that even the most commercialised quintile of farmers marketed only 50 percent of their output. modernising smallholder agriculture in uganda will require helping farmers to improve their farm practises, utilise more modern farm inputs, especially high yield variety ( hyv ) seeds and produce more output for the market, thereby raising yields per acre and labour productivity. we know, from the work done on demonstration plots supported by development agencies that farmers can, in principle, achieve large increases in their crop yields even with relatively low input technologies combined with the adoption of good agricultural practises. ugandan smallholder farming has the potential for transformation but the constraints to this transformation are both large and multifaceted. a lack of access to finance by smallholders is one of these constraints, although not necessarily the most binding constraint for the majority of smallholder farmers at this early stage of agricultural development. to tackle the multiple constraints to the modernisation of smallholder agriculture, we need to adopt, and persevere

and seamlessly pay our bills online, without having to : • fill in our card details for the umpteenth time ; or bis central bankers ’ speeches • fill out lengthy paper - based giro forms to authorise standing payment instructions which take weeks to be approved. our vision is to create a bill payment experience where consumers and businesses can : • electronically apply for giro bill payments ; • seamlessly pay bills via a “ request for payment ” function that leverages off fast fund transfers without needing to bank with the same bank as the biller ; and • manage their standing payment instructions online or on their mobile phones. mas is working with the banks and the payments industry to create seamless bill payments and collections. mobile payments for public transport – account - based ticketing the way we pay for public transport is also due for a refresh. the land transport authority has recently announced that by the end of this year, it will be conducting a pilot for its account - based ticketing system. • this system will allow commuters to use their existing contactless credit and debit cards to pay for train and bus rides. • no longer will users have to queue to top - up their stored value transit cards. • users will even be able to use their mobile wallets to pay for public transport. an account - based ticketing system will bring singapore in line with other cities with worldclass public transport payment infrastructure such as london. pervasive digitisation – maximising productivity gains from e - payments the fourth strategy is to help businesses to digitise their processes and integrate them with electronic payments solutions, so as to maximise productivity and efficiency gains. minister iswaran spoke yesterday about how government agencies are working with smes to help digitise their business processes and take advantage of e - payments. i need not elaborate. i will just give an example. • it often does not make sense, especially for an sme, to adopt an e - payment solution or platform but continue to use paper invoices. • reconciliation of paper invoices with e - payments becomes a challenge, and the potential efficiency gains from e - payments will remain elusive. • only if the business processes from front - to - back are all digitised and integrated with e - payments, will it make commercial sense and raise productivity. conclusion let me conclude. this is a conference on fintech and financial inclusion. of all the developments in fintech, it is in payments where the gains in financial inclusion are