BUGESERA - Kenya Commercial Bank (KCB), in partnership with the USAID’s Postharvest Handling and Storage Project (PHHS), recently extended a loan worth Rwf 40 million to “Indakuki” maize cooperative in Bugesera District, Eastern Province.
The loan will enable the cooperative to purchase grade-one grains from members and sell these directly to the World Food Programme, through the Purchase for Progress (P4P) program.
According to Guy Rwaburindi, the head of Small and Medium Enterprises at KCB, cooperatives in Rwanda neither had the funds nor facilities to buy grain from their members, subsequently failing to benefit from profitable ventures like P4P.
“We believe that this new model will push the financial sector to start looking at the agricultural market more seriously. As KCB proves, it can be done. More banks will want to make similar loans to cooperatives,” he stated.
Rwaburindi pointed out that as farmers access greater markets with higher quality crops, they will be able to increase their incomes and livelihoods.
The president of the “Indakuki” Cooperative, Jean Pierre Rwasa, said that it had been difficult to secure bank loans.
“We did not have enough to mortgage and our farmers did not have enough training to access bank loans,” said Rwasa.
He added that the loan would help them to buy and collect maize from the 1,676 farmers in their cooperative.
“These farmers can now get immediate cash for their maize, allowing them to pay school and medical fees for their families,” Rwasa noted.
The Indakuki Cooperative secured the loan within three days of providing a purchase note from an authorised buyer, World Food Programme. Farmers received a premium price and 100 percent payment within two days of delivery to the cooperative.
The Ministry of Agriculture is working in partnership with USAID’s PHHS project and the WFP to reduce post-harvest losses and improve food security in the country by linking producers with surpluses of staple crops to domestic and regional markets.