Financial Services and Climate Risk Management Along Agricultural Value Chains: The case of the Centenary Bank in Uganda

This briefing note examines the role of financial services in enabling climate risk management (CRM) along agricultural value chains, using a case study of Centenary Bank's services to rice value chain actors in Eastern Uganda. It highlights how climate hazards like floods and droughts impact all actors from producers to consumers and argues that tailored financial products and improved climate information are essential for building resilience.

• Climate change is significantly impacting agricultural value chains in Uganda, with temperatures increasing by approximately 0.2°C per decade since the 1960s and an increase in the frequency and intensity of floods and droughts.
• Climate hazards create ripple effects across the entire rice value chain; for example, severe flooding in Butaleja and Bukedea in 2011 caused total crop losses for farmers, which subsequently reduced rice availability for millers and traders and increased consumer prices by nearly 30 per cent.
• Financial services support climate risk management (CRM) by providing capital for adaptive management (such as irrigation and resilient seeds) and offering savings and credit to smooth income fluctuations and absorb shocks.
• Centenary Bank's existing services already facilitate CRM by allowing actors to diversify income sources and meet household needs during climate-induced income drops, though there is a need for more affordable and appropriately designed products.
• Climate risks also negatively impact financial service providers like Centenary Bank through increased operating costs for damage assessment and higher loan default rates when farmers cannot make payments due to extreme weather.
• Value chain actors and Centenary Bank identified priority investments for CRM, including the dissemination of weather and seasonal forecasts, training in climate risk analysis, and preferential interest rates for clients implementing CRM strategies.
• A significant barrier to integrating CRM is the limited ability of both value chain actors and financial institutions to access and interpret relevant climate and weather information.

APA

Dazé, A., & Dekens, J. (2016). Financial Services and Climate Risk Management Along Agricultural Value Chains: The case of the Centenary Bank in Uganda. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/climate-resilient-value-chains-case-centenary-bank-uganda.pdf

Chicago

Dazé, Angie, and Julie Dekens. Financial Services and Climate Risk Management Along Agricultural Value Chains: The case of the Centenary Bank in Uganda. International Institute for Sustainable Development, 2016. https://www.iisd.org/system/files/publications/climate-resilient-value-chains-case-centenary-bank-uganda.pdf.

Wikipedia

{{cite report |last1=Dazé |first1=Angie |last2=Dekens |first2=Julie |title=Financial Services and Climate Risk Management Along Agricultural Value Chains: The case of the Centenary Bank in Uganda |publisher=International Institute for Sustainable Development |date=July 2016 |url=https://www.iisd.org/system/files/publications/climate-resilient-value-chains-case-centenary-bank-uganda.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{daz2016financial, author = {Dazé, Angie and Dekens, Julie}, title = {{Financial Services and Climate Risk Management Along Agricultural Value Chains: The case of the Centenary Bank in Uganda}}, institution = {International Institute for Sustainable Development}, year = {2016}, month = jul, url = {https://www.iisd.org/system/files/publications/climate-resilient-value-chains-case-centenary-bank-uganda.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }