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

The document examines the intersection of agricultural finance and climate risk management (CRM) through a case study of Centenary Bank's operations in Eastern Uganda. It highlights how climate hazards like floods and droughts disrupt the entire rice value chain, increasing loan default rates for banks while threatening farmer livelihoods. The research identifies that while existing savings and credit services provide some buffers and allow for income diversification, there is a need for more tailored products, such as preferential interest rates for CRM strategies and improved climate information services, to enhance resilience for both value chain actors and financial providers.

• Climate change in Uganda is characterized by rising temperatures, increasing frequency and intensity of droughts and floods, and shifting rainfall patterns, which threaten the sustainability of agro-commodity value chains.
• Climate hazards impact all stages of the rice value chain; farmers face direct crop losses, while millers, traders, and transporters suffer from reduced supply, higher raw material costs, and disrupted transportation links.
• Financial services support climate risk management by providing capital for adaptive management (e.g., irrigation and resilient seeds) and offering savings and credit to smooth income fluctuations during shocks.
• Existing services from Centenary Bank have enabled some actors to diversify their income sources, such as farmers starting small trading businesses or millers opening retail shops.
• Climate risks create financial instability for banks through increased operating costs—due to the need for field assessments of crop damage—and higher loan default rates.
• Value chain actors prioritize investments that enable informed decision-making, such as training in climate risk analysis and the dissemination of weather and seasonal forecasts.
• A significant barrier for financial institutions like Centenary Bank is the lack of capacity to access and interpret relevant climate and weather information for systematic risk management.

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} }