Rwandan banks urged to support farmers' access to credit
Banks have been urged to fund farmers "in an efficient and sustainable manner".Rwanda's Ministry of Agriculture has urged banks to support the government's efforts to fund ventures that add value to agricultural produce "in an efficient and sustainable manner".
Raphael Rurangwa, the director general in charge of planning at the Ministry of Agriculture, said on Wednesday (January 14th) that farmers and agro-processors should be supported to reduce post-harvest losses and ensure stakeholders benefit more from agro-enterprises, the New Times reports.
He added that under the Post-Harvest and Agribusiness Support Project, farmers and small-and-medium enterprises (SMEs) with bankable projects will benefit from a 40 per cent loan guarantee.
The project - which was launched in March 2014 to promote agribusiness and reduce post-harvest losses - has so far reduced post-harvest losses from 30 per cent to 10 per cent, according to the Rwandan Ministry of Agriculture. The government wants to reduce these to five per cent.
This announcement comes a few weeks after the signature of an agreement between the East African Exchange (EAX), Banque Populaire du Rwanda and Ecobank, to allow grain farmers to acquire loans at affordable rates in Rwanda.
They will be able to acquire short-term credit from the banks of up to 70 per cent of the value of their produce at interest rates of between eight and 20 per cent.
In Rwanda, agricultural loans account for 10 per cent of total bank loans.