There is a need for designing innovative and affordable agricultural loan products for women smallholder farmers who are still struggling to access much-needed funding to boost their farm productivity, analysts have suggested.

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The call follows a report commissioned by the Gender Monitoring Office (GMO), which indicated that access to loans for women farmers has reduced by 78.5 per cent, compared to 57.4 per cent for men farmers during 2019-2023.

In 2019, agricultural loans were accessed by 14,882 men and by 3,836 women. By 2023, loans accessed by men had significantly reduced to 6,337 while loans accessed by women dramatically dropped to 822.

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According to the report, this gender gap is partly due to women’s higher representation in subsistence agriculture, a field which does not receive support from the financial sector.

Although women collectively have access to more agricultural land, the access does not translate into productivity given that ownership is fragmented into small parcels.

COVID-19 has further constrained access to loans and repayment capacity, it said.

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"Micro-finance institutions should design innovative agricultural loans for women smallholder farmers, especially young women. These products should carry low interest to be attractive to more women farmers,” Jackson Kwikiriza, the Executive Director at the Association of Microfinance Institutions in Rwanda (AMIR) told The New Times.

Need for ‘single digit’ rate

Kwikiriza suggested reducing interest states for smallholder women farmers, introducing assurance or guarantee schemes in micro-finance institutions, and embracing agriculture insurance as key to allowing women access to needed financing and subsequently ensuring increased productivity.

The report shows that men have more bank accounts and receive more loans than women in terms of quantity and value, perhaps because men traditionally have greater control over ‘productive’ assets such as land and livestock.

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Placide Shema, Regional Manager of Agriculture Finance Programme at Opportunity International, an organization which supports smallholder farmers, echoes the same sentiments that projects designed for farmers should include aspects of facilitating access to finance for women smallholder farmers.

"This will ensure that they are able to get affordable agro-inputs,” he said, adding that there is a need for increasing women’s financial literacy and skills.

Opportunity International plans to implement a project that targets to expand the financial capabilities of women farmers.

The project targets to digitally profile 24,000 smallholder farmers, 16,800 of whom are expected to receive training from farmer support agents to deepen their knowledge of good agricultural practices.

"At least 12,000 smallholder farmers are expected to gain access to loans. This will ultimately increase their ability to access quality inputs, increase yields, as well as boost farm income,” Kwikiriza noted.

In 2022, the government with the support of the World Bank launched a $300 million project to commercialise and de-risk the agriculture sector through subsidized loans. With this, farmers are insured at a rate of 40% and pay 8 per cent interest below market rates.

Sabine Abewe Hategekimana, an Agriculture and Animal Products Supply Chain and Market analyst at the Ministry of Agriculture and Animal Resources (MINAGRI), believes this will make a difference.

"We are also working with banks to design loan products dedicated to farmers,” she said.

What women farmers say

Appolinalie Yabaragiye, a woman farmer based in Muhanga District in the Southern Province, said that women are forming saving groups, and consolidating their fragmented land parcels to increase their chance to get access to loans.

"Through these groups, we gain knowledge about good agricultural production, while consolidating our land greatly enables us to get access to loans from financial institutions,” she said.

Josiane Ingabire, a farmer from Kamonyi District said that women farmers need smart phones to be able to access information related to agricultural loans products.

"Savings groups are key in paving the way for unlocking access to finance. When we work with banks to increase our savings, they then increase trust in us. This makes it possible for us to get access to the much-needed loans,” she said.