KIGALI - THE Ministry of Agriculture and Animal Resources has called upon Microfinance institutions and banks in the country to increase financing to Rwandan farmers.
The call was made by, Ernest Ruzindaza, the Permanent Secretary in the ministry, while officiating a two-day workshop on how to improve the agricultural business sector.
The meeting was organized by the Association of Microfinance Institutions in Rwanda (AMIR) in conjunction with Terrafina Microfinance.
“There is inadequate financial support to the agriculture sector, and to improve this, you in the financial sector should diversify ways of extending loans to agri-business operators to have a bigger impact on the country’s development,” Ruzindaza said.
He also urged the participants to first understand the concept of ‘chain value’ and the shortcomings to financing the agricultural sector in the country.
The Central Bank Governor, Francois Kanimba, said that several banks and microfinance institutions have little knowledge regarding how rural agri-business operators work hence making it difficult for them to provide loans.
He also noted that majority of these operators in the rural areas do not know how to make economically viable project proposals, hence hindering their getting loans from these institutions.
He however noted that the Rwanda Development Bank (BRD) and Banque Populaire du Rwanda are the only banks that have tried to extend loans to rural farmers compared to other banks.
Kanimba added that the Central Bank would mobilize all financial institutions to increase their lending portfolio to farmers.
During his presentation, the chairman of AMIR, Faustin Zihiga acknowledged a big gap between the agri-business operators and those willing to finance their daily activities but revealed that they would work on bridging this gap.