FEATURED: Equity Bank in fresh bid to boost agric financing
Tuesday, June 01, 2021

Equity Bank Rwanda PLC and Umujyojyo Investment Group Plc (UIG Plc) have signed an agreement to boost financing for the agriculture sector.

The agreement was signed, on May 31, by Evariste Murwanashyaka the Founder and CEO of Umujyojyo Investment Group and Hannington Namara, Managing Director of Equity Bank.

The agreement will focus on business and investment as well as networking and visibility cooperation.

According to officials, it is both parties shall participate in the common drive to transform community traditional farming practices and change farmers’ attitude towards access to finance.

Namara said: "We appreciate the trust placed in us and we assure Umujyojyo that we will be a good partner. We support agribusiness, and we are more than happy to work with them in this journey for more and better progress.”

He said that the new drive is contained in Equity Bank’s business strategy including its launched series of new loan products targeting the agriculture sector, in a move that is likely to revolutionise agriculture financing in Rwanda.

Over the next five years, the Bank is planning a six-fold increase in its agricultural funding, to 30 per cent of its total loan portfolio.

Currently, only 5 percent of its Rwf200 billion loan portfolio goes to agriculture.

The opportunities are also available to members of Umujyojyo Investment Group Plc which was established in May 2019 by young agronomists, Veterinarians, environmentalists and other young graduates in the similar fields.

With over 1,500 members, Umujyojyo has a vision of promoting sustainable innovations and agricultural investment for the country’s economic growth and youth employment.

"We are excited to officiate modality for working together. Umujyojyo is equipped with different people with different expertise all aimed at supporting agriculture,” Namara said, "Our Bank is part of agriculture because it is the largest employer. Secondly resonates with our mission and vision of impacting lives. Agriculture must be a business that makes money and transforms people’s lives.”

Namara believes that by putting together science, evidence, research, and technical expertise, there could be better outcomes from signed MOU.

"In our business strategy we target eight value chains in the agriculture sector. We have designed products and services to cater for investment, seasonal working capital, post-harvest investment and others. We cannot do it alone. We have to use our network and that is why we approached Umujyojyo Investment Group that have professionals and expertise we require,” he said.

He said that they will work together even beyond financing farmers.

"Not every farmer requires financing. They may require other services such as savings, investments and others. Together we can structure products and services that resolve farmers’ problems because problems are different from farmers, aggregator, input seller, seed multipliers…” he said.

Murwanashyaka said that the cooperation with Equity Bank is based on the fact that agriculture is the main source of income in Rwanda.

Compared to other sectors, he added, agricultural growth can reduce poverty faster and effectively.

However, he said: "If available financial instruments do not match farmer’s needs, farmers may be discouraged to adopt better technologies to purchase agricultural inputs or to make other informed decisions that can improve the efficiency of their business.

With Equity Bank, we are improving access to finance which will increase farmer’s investment choices and provide them with more effective tools to manage risks.”  

He added that the signed agreement will also facilitate Umujyojyo Investment Group Plc members and beneficiaries to have access to finance at negotiated rates for sustainable climate-smart agriculture and livestock.

"Our aim is to invest in different agriculture projects and be a model to other farmers as professionals. Working with Equity Bank will help us have access to financial resources as well as to farmers and cooperatives around the country to have access to finance,” he said.

He said that the group which has so far mobilized over Rwf90 million will also collaborate with the bank in other opportunities to promote agriculture.

"We have started to invest the money in projects such as a pig rearing. We want to also process pigs into different products very soon. We have an agro-vest pharmacy, animal feeds shops and we are expanding our projects. We need advice from banks like equity on spending such money but also finance to expand our business. We will work together to analyse and manage risks in agriculture,” he said.

Equity Bank Rwanda, which began its operations in 2011, has a network of 14 branches. It is supported by 2800 banking agents, 1220 merchants and a network of 21 ATMs.