DFCU Bank has set November 6 as the auction date for Igara Growers Tea Factory and its properties to recover an outstanding loan of about Shs5 billion, following the facility's failure to honour multiple requests for payment extensions. The factory, valued at Shs47 billion according to a draft valuation, ceased operations seven months ago after financial difficulties left workers and tea farmers unpaid and National Social Security Fund contributions unremitted. The planned sale has triggered alarm among the factory's more than 7,000 shareholders and tea farmers, who fear the loss of a key facility in southwestern Uganda's agricultural sector.
The crisis began when the factory's board obtained a $1 million loan, equivalent to about Shs4 billion at the time, from DFCU Bank in 2024 to support operations and purchase fertiliser for distribution to tea farmers. According to tea farmer Agaba Godfrey, the board failed to pay the fertiliser supplier while requiring farmers to pay for the product they received. The factory subsequently became engulfed in leadership disputes, management conflicts, lack of operational capital and repeated strikes. As interest accumulated on the outstanding loan, DFCU issued a default notice. On April 2, 2026, the factory requested a three-week moratorium but failed to meet the proposed terms. In May, the bank's lawyers issued a second notice demanding payment within 45 working days, warning that the mortgage could be enforced. On October 9, DFCU advertised the property for sale.
Beyond the DFCU loan, the factory reportedly owes more than Shs14 billion to various creditors, including the NSSF, suppliers, workers, tea farmers and the Uganda Revenue Authority. Eliab Muhoozi, a prominent tea farmer in Kyamuhunga, Bushenyi District, said farmers intended to use all means available to rescue the factory. At a crisis meeting held at Bushenyi Playground, farmers established a committee headed by Muhoozi to seek President Museveni's intervention. They also resolved to petition court for permission to convene an extraordinary general meeting where shareholders could elect an interim board to lead negotiations with the bank.
Kakonge Apollo Lee, executive director of the Western Ankole Civil Society Forum, urged the government to intervene to prevent the sale. He called on the Ministry of Finance, Agriculture and Trade to issue letters of comfort to DFCU asking the bank to halt the auction while the government seeks funds for a bailout. Tea farmer Ronald Rwankangi said farmers planned to go to court immediately to pursue the extraordinary general meeting while also appealing directly to the President. The factory, one of the oldest tea-processing facilities in the region, remains central to the livelihoods of thousands of shareholders and tea producers dependent on its operations.