Burundian farmers calling for the creation of an agricultural bank

Oct 18, 2012

In Burundi, the Confederation of Agricultural Producers Associations for Development (CAPAD), which regroups 26,000 households, called for the establishment of an agricultural bank to improve farmers' access to credit.

In Burundi, the Confederation of Agricultural Producers Associations for Development (CAPAD), which regroups 26,000 households, called for the establishment of an agricultural bank to improve farmers' access to credit.

The poor access to agricultural credit remains a major handicap when it comes to increasing food production, as farmers cannot afford the high interest rates charged by commercial banks, sometimes reaching 24 percent, Miburo Mathias, President of confederation, told Xinhua news agency last Wednesday.

This is why he believes that an agricultural bank would promote farmers' access to credit through preferential rates.

According to figures from the presidency of Burundi, the agricultural sector alone contributes to about half of gross domestic product and generates nearly 80 percent of export earnings.

But agricultural financing remains underdeveloped in the country. The agricultural sector accounted for only 0.78 percent of funding in 2008 and 1.07 percent in 2009, with an average interest rate of 17.5 percent and 16.7 percent respectively.

Farmers are struggling to provide the guarantees required by banks and financial products are often inadequate.

Mr Miburo criticised commercial banks for setting up instalments to repay credit on short term period before harvest, causing many bankruptcies among farmers organised into cooperatives.ADNFCR-2976-ID-801472273-ADNFCR