Relief as IFC Signs $9m Financing for Rwandan Farmers, Reports KT Press

    KIGALI, RWANDA, February 18, 2015 /24-7PressRelease/ -- The International Financing Cooperation (IFC) has signed a $9.2m financing program through which Rwandan farmers' cooperatives will access loans through Kenya Commercial Bank (KCB) Rwanda Ltd.

Maurice Toroitich, KCB Managing Director told KT Press, "We have chosen to finance the agricultural sector in order to facilitate both domestic food security and higher rural incomes."

He said that farmers with successful proposals will access the loans at a 9% interest rate. The bank has agreed farmers can repay the loan seasonally after harvesting and selling their produce.

The deal comes at a time when the Rwanda Cooperative Agency (RCA), the umbrella of all cooperatives, is seeking an investor to partner in establishing a cooperatives bank to address the lack of financing for agriculture by local banks.

Local banks continue to defend their position saying the sector is 'insecure' for investment.

The central banks says, of the total lending portfolio from commercial banks, only 5% goes to agriculture and even when a bank accepts to offer a loan, interest rates go up to 21%.

Toroitich explained that, "we see financing the agricultural sector as a way to promote market oriented agriculture".

For any farmer to qualify, they should; organize under cooperative legally registered, have experience of minimum one year (2 seasons) in agricultural sector, have storage facilities, experience of delivering harvest to off takers and good banking and loan history/record among others.

Ethiopis Tafara, IFC Vice President for Corporate Risk and Sustainability says, "Supporting local grain production can have a significant impact on food security in Rwanda where 45% of people live in poverty and malnutrition is widespread."

"IFC and Global Agriculture and Food Security Program's (GAFSP's) partnership with KCB will play an important role in expanding financing for farmers," Ethiopis added.

Through the loans, farmers are expected to gain working capital for seeds, fertilizers, land preparation, weeding, harvesting and receive comprehensive technical advice provided by IFC and other partners.

According to IFC, the financing targets 11 farmer cooperatives in eastern Rwanda, helping more than 12,000 small-holder famers gain access to improved seeds, fertilizers and training in better farming practices.

The cooperatives will supply maize and soybeans to a food processing plant that aims to produce fortified cereals for people suffering from malnutrition--particularly babies and children.

For Media Enquiries:
Patrick Bigabo
KT Press
[email protected]

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