KIGALI - Farmers in the country will be able to access loans to finance their agricultural projects under the Rural Investment Facility 2 (RIF2), a project aimed at promoting agriculture.
The US10m (approx Rwf5.5bn) fund is provided by the World Bank (WB) and is also meant to attract the private sector to invest in the agricultural sector which employs 80 percent of the Rwandan population.
The private sector looked at as the engine of growth, has for years shunned investing in agriculture. According to Dr Agnes Kalibata, State Minister for Agriculture, the fund will boost food and livestock production and add value to agricultural products.
“The fund is to support seed production. Primary agriculture and processing,” Dr Kalibata said, stressing that adding value to food crops extends their lifetime.
According to Kalibata, banks and Micro-finance institutions lending to the agriculture sector can access this money from the National Bank of Rwanda (BNR).
She said that the government will put money in the banks where-by the farmers can easily access loans and the banks will assure them of compensation in case of any losses.
She said a memorandum of understanding was signed on Tuesday between her ministry and the WB to fund the agricultural sector.
Kalibata added that the government is more than willing to provide source of finance to encourage farmers produce more.
Speaking on behalf of WB, Dr. Loraine Ronchi said that the bank was delighted to participate in this noble venture and appreciated the effort the government has shown in boosting the agricultural sector.
Kalibata said that the government has high expectations of the project and is sure that the farmers will turn up for the loans more than they did in RIF 1.
The RFI 1 is a similar project that ran for five years from 2002 to 2007.
Besides providing the money, the WB has helped in innovative ideas like assisting in providing ware-house facilities to assist farmers preserve and store their produce and later sell at a better price in the future.
The Minister also underscored that the government has embarked on creating awareness to the farmers through the media and other channels to encourage them use the World Bank facility.
Kalibata also expressed optimism about the agricultural sector being the number one contributor to the transformation of the country’s economy.