Financial institutions and development partners have been urged to be more engaged in financing agriculture sector instead of looking at it as a risky venture. Agriculture minister Dr Geraldine Mukeshimana made the call yesterday during a meeting on agriculture finance and its role in economic growth. She said, “agriculture is not a risky sector. We know some financial institutions that did their best in agriculture financing and never made losses as many people think. The sector rather presents a huge opportunity to exploit.” Currently, agriculture financing stands at 2.3 per cent of loan portfolio in commercial banks while the target, according to the Ministry of Agriculture, is to reach 18 per cent by 2018. Dr Jonathan N. Agwe, senior technical specialist in inclusive rural finance services in the Financial Assets and Markets (FAME) cluster at the International Fund for Agriculture Development (IFAD), said there is a need to proceed with rural transformation to ensure economic growth where agriculture is the backbone. Espoir Serugo, the head of agriculture finance unit in Urwego Opportunity Bank, said banks should work hand in hand with farmers to ensure they get loans that help both sides to cope with risks in agriculture sector. He said, “the sector has many risks that can be mitigated and coped with in case banks collaborated with farmers to design a special loan for agriculture. For instance, banks have always offered to farmers loans that require monthly disbursement while farmers have a single harvest per season that has to generate funds for repayment. Banks have to design loan repayment schedules that allow them to pay per season instead of monthly.” “We use agronomists to analyse farmers’ proposals to ensure farmers are well guided and tipped on possible factors that can lead them to failure to service the loan which I hope would help other banks to offer better services to farmers,” Serugo explained. According to the 2013/14 report by the National Bank of Rwanda, agriculture accounts for a third of Rwanda’s Gross Domestic Products (GDP) and is the main economic activity for rural households. The sector is said to meet 90 per cent of the national food needs. editorial@newtimes.co.rw
