Connecting potato farmers to markets and banks yielding results in Rwanda
Rwanda’s agriculture sector remains the largest employer with about 67.6% of the population relying on it, according to the fourth Rwanda Integrated Household Living Condition Survey (EICV4). The biggest percentage of those working in the sector are farmers.
The farmers therefore represent the biggest opportunity for scale and impact in financial inclusion today.
However, farmers face a lot of challenges ranging from climate change effects to low investment in their activity due to little capital.
Most financial institutions in Rwanda just like elsewhere in the world, are still dragging their feet when it comes to providing loans to farmers making access to financing a bit difficult, yet the capacity of farmers to save and invest is sometime very low.
The hesitance stems from the fact that agricultural production suffers from weather risks such as drought and floods as well as market risks.
“Banks fear agriculture because of climate change. Secondly, financial institutions don’t regard agriculture as a profitable business,” says Remy Ndagijimana of Vision Fund Rwanda.
In Rwanda, farmers need agricultural credit to purchase inputs (fertilizer, seeds, pesticides) to raise agricultural productivity, purchase implements and to better manage risks ( prices, weather).
Accessing finance to increase productivity
Charles Nsabimana is an Irish potatoes farmer in Rugarama sector, Burera District. He and other farmers formed the cooperative ‘Inyenyeri y’Ubuzima’ to help them to pool their little resources and have access to markets, inputs and share knowledge.
His district is one of the areas in the Northern Province prone to disasters especially flooding because of the presence volcanic mountains.
“In 2015 we lost about eight tons of potatoes because of the rains –the potatoes rot in the ground. The following year, 2016, we lost about 5 tons because the rains washed away the crops. We needed financing to restart our activities,” says Charles.
“My crops were young when it rained, I didn’t get any harvest. It was hard for me to pay school fees for the children and to pay health insurance. I was unable to achieve my goals of the season, “says Kampera Noella of Nyabihu District, referring to the 2017 rains in which her family house and crops were completely destroyed by floods from the mountains.
With the financial support from the European Union (EU), Food and Agriculture Organization of the United Nations (FAO) in 2015 implemented a project “Strengthening linkages between small actors and buyers in the roots and tubers sector in Africa” to increase the sector’s output and link farmers to markets. The project targeted potato farmers from three districts from the Northern Province namely; Musanze, Burera and Nyabihu.
Through the project, potato farmers were trained in modern farming techniques, how to mitigate disasters, working with financial institutions, and micro financial institutions were presented with opportunities in working with farmers through a joint farmer-bankers training.
Chantal Mukeshimana is the chairperson of KOABIKI Cooperative in Musanze District.
“After undertaking the trainings we became confident to work with financial institutions. As a cooperative we acquired a loan totaling to Rwfr10 000 000 (USD 11 494),” says Chantal.
Thirty members of Chantal’s cooperative have since acquired individual loans from different financial institutions.
“The project helped us to see opportunities in agriculture to the extent that now our staff feel obliged to have farmers as their clients. Ninety percent of the loans given to them has been reimbursed. We’re flexible when a farmer encounters losses,” says Remmy
More 20 groups have been given loans without asking for a collateral.
But what happens when farmers experience losses?
Remmy explained that the micro financial institution goes to the field and assess the loss and a decision can be taken either to increase the repayment period or add the farmer more finances to restore the activities.
Growing for markets
Increasing potato production and productivity goes with planting healthy seedlings. Farmers were trained in identify good potato seedlings from the bad ones in the garden in order to get quality seedlings to grow and distribute to other farmers.
“We were trained to grow for markets. Right now we have contracts to supply schools,” Charles added.
Members of KOPANYA Twigire Cooperative improved their agriculture and started selling potatoes.
“Farmers in our cooperative used to grow potatoes primarily for home consumption. Today we see potato farming as a business like any other,” says Ferdinand Hakizimana.
Contact:
Teopista Mutesi | Communications Specialist | Email: [email protected] OR [email protected]