Banks put on the spot over agriculture loans

Agriculture remains one of Rwanda’s most underfunded sectors despite its outsized role in the economy, a trend highlighted during the release of the Monetary Policy and Financial Stability Statement (MPFSS) for the first half of 2025. Officials warned that without stronger financing, the sector’s growth potential, particularly in exports, could remain untapped. Speaking during an event on September 18, in Kigali, the Minister of Agriculture and Animal Resources, Mark Cyubahiro Bagabe, expressed concern over the sector’s limited access to finance, observing that it remains the least-funded among all the top 10 economic sectors in terms of loan share as of June 2025. ALSO READ: Agric minister backs farmers' supply contracts as loan collateral Indeed, MPFSS showed that as of June 2025, the outstanding loans in banks grew by 15.4 per cent to Rwf4.9 trillion, lower than the growth of 16.1 per cent in the corresponding period of 2024; while the growth of new authorised loans moderated by 17 per cent to 1.2 trillion in the first half of 2025, against the growth of 25 per cent in the first half of 2024. At the end of June 2025, the top six financed sectors accounted for 85 per cent of total loans. They are construction (18 per cent), trade (17 per cent), manufacturing (17 per cent), households (16 per cent), transport (11 per cent) and hotels (6 per cent). The agriculture, forestry, and fishing sector brought up the rear among the top ten financed sectors, accounting for just 2.7 per cent of total bank loans. This is a low figure given that under the fifth strategic plan for agriculture transformation (PSTA 5), the Ministry of Agriculture and Animal Resources targets to raise agriculture’s share of total bank loans from 6 per cent in 2023/24 (the baseline) to 10 per cent by 2029. Minister Bagabe observed that the data show agriculture received the lowest financing, even though it holds great potential—particularly in agri-exports. ALSO READ: How Rwanda plans to generate $1.5bn in agricultural exports Although financial institutions have liquidity, as per the central bank publication, Bagabe stated that many agriculture stakeholders continue to face significant barriers when seeking credit. “I think we need to have a dialogue to see how we can capitalise the financial flows into the agriculture sector,” he said, stating that access to finance was among the top concerns raised during a recent meeting with financial institutions and agri-exporters. While acknowledging risks in the agriculture sector, Bagabe said that there are some instruments in place to ensure that they are minimised through irrigation, agriculture insurance, among others. Also, he said, there are some guarantees for people venturing into agriculture, as well as concessional loans. “Maybe we need to meet the financial sector and those who are in agriculture, and see how we can create a connection,” he said. ALSO READ: Farmers to access cheap loans under $300m agric project Less than 3 per cent of total loans go to agriculture Responding to Bagabe’s remarks, Soraya Hakuziyaremye, the Governor of the National Bank of Rwanda, echoed the concern, highlighting the mismatch between agriculture’s economic significance and its limited financing. She stressed that this is particularly concerning given that agriculture contributes nearly 25 per cent to Rwanda’s gross domestic product (GDP) and employs around 70 per cent of the population. “There needs to be more ways and more engagements to make sure that the financing of the agriculture sector increases. We were half happy that at least we see agriculture now coming in the top ten sectors that are financed. But as we've seen, the financing is still less than 3 per cent of the total outstanding loan portfolio,’ she said. “And so, we would welcome that deeper engagements, not only with the banking sector, but also the insurance sector, to make sure that products that are developed for the agriculture sector as well as risk mitigating schemes, especially through, for instance, the National Agriculture Insurance Scheme, can allow us, as Rwanda, to fund better the agriculture sector.” The Central Bank, she said, is ready to facilitate multi-sectoral discussions and explore financial instruments that can unlock more funding for agriculture. Hannington Namara, Chairperson Rwanda Bankers’ Association, also weighed in, acknowledging the persistent challenges in channeling finance to the sector. “I think the challenge we still have, first of all, agriculture remaining very fragmented, channeling a lot of resources to agriculture continues to be a challenge,” he said, pointing out that many of the banks have agriculture units that look at potential projects to fund. Namara underscored the need for banks to collaborate closely with government and agri-business stakeholders to improve financial access, pointing to the potential of technology to drive innovation and efficiency.

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Banks put on the spot over agriculture loans