ENFORCING REPAYMENT

Recovery of loans can be enforced where agreements made between a private sector lender and the smallholder borrower are legally binding, and where taking legal action against defaulters is possible. Collateral can be used to secure loans, and may be seized. Enforcing repayment generally has not been possible in Uganda, though interestingly, it has occurred in the tobacco sector, where the tobacco companies took it upon themselves to propose new legislation which binds smallholders and company into an agreement. The companies also sponsored workshops to sensitise relevant parties about the new legislation and have collaborated with the police to successfully enforce the law.