Agriculture financing in most African countries accounts for about 16% to 70% of the total monetary value of produced goods and services – gross domestic product (GDP) – yet, the sector gets only about 5% of the total loans by banks and other financial institutions.

This was said by Kefa Nyakundi the Chief Executive of Ennovative Capital (ECap)  a Kenya-based Financial Technology (Fintech) company during the third edition of KCB Rwanda’s Experts Talks.

The discussions, that took place in Kigali yesterday, aimed at finding innovative ways for trade and commodity finance. 

Nyakundi expressed concern that Africa does not use technology which adversely affects farm yield, pointing out that agricultural productivity in the continent is low compared to developed countries.

"Africa’s economy is principally agriculture…yet, we are based on small-holder agriculture. Our productivity is very low compared to the world acreage. We do like 25% productivity of one acre… our productivity benchmarked to the world is very low,” Nyakundi said.

 "So that is where the struggle comes in, and again, that is where innovation comes in to see how do we ensure that we are able to attract more money into agriculture which is the backbone of our economies.

If you use science, then you know whether it will rain or not and you regulate the soil moisture and enrich the soil. If sun intensity is high you use irrigation,” he said giving examples of technologies that farmers use to ensure that they produce throughout the year. 

"That is how we will then be able to ensure food security,” he said.

Banks have been reluctant to lend to the agricultural sector yet there were no technologies to help farmers build their resistance to drought or crop pests and diseases which affects productivity, Christine Murebwayire, the Chairperson of the chamber of Agriculture and Livestock at the Private Sector Federation (PSF) told The New Times.

"Banks say that the reasons that they do not lend to agriculture is that there is no insurance, and as there is no advanced irrigation system, dry spells cause crop failure,” she said calling for embracing ICT to address financing for agriculture and increasing its productivity.

 The senior manager for Agribusiness at KCB Rwanda, Alexis Mpirwa, said the bank has developed a product called Mobigrow, which will allow smallholder farmers to borrow money using their mobile phones so as to get funds to buy fertilisers and other activities, starting from September 2018.

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