Rural transformatmn that embraces an agrarian revolution requires self-sustained capital accumulation plus people's participation in the development process. A system of people's rural development banks constitutes an appropriate fmancial system for rural transformation since it involves the above two conditions. A pilot project in one district of Uganda shows that a nationwide system of people's banks would almost double deposits, multiply the volume of credit several-fold, and dehver the necessary technical assistance to rural producers. Its considerable quantitative and qualitative impacts on the rural economy justify immediate attention to this vital rural development programme.