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HOME > Providing Services to Smallholders > Credit - How can it best be provided? > Screening and Selection of Borrowers > Repayment Considerations > 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.
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Natural
Resources Institute 2003
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