Development Bank of Rwanda-BRD is extending Rwf 80 billion to finance agriculture, the country’s sector which is struggling with credit access.
The facility comes at a time 200 experts are meeting in Kigali for a three day conference to develop new models that would help accelerate rural agriculture financing.
The conference was organized by African Rural and Agricultural Credit Association-AFRACA in partnership with Development Bank of Rwanda-BRD, ministry of Agriculture and Access to Finance Rwanda.
Agriculture gets only 6 percent of financing from commercial banks, according to Rwanda Central Bank.
“Our focus is to have enough credits available for agriculture sector,” said Alex Kanyankore, Managing Director of Development Bank of Rwanda- BRD.
BRD remains the leading lender to agricultural projects. In the last five years, the bank invested Rwf 40billion in agricultural financing.
Rwanda’s Central Bank says it is going to push other commercial banks to lend to the country’s largest sector contributing 33 percent to GDP.
“Banks need to learn faster to finance rural agriculture and we need to push them to learn faster,” said Monique Nsanzabaganwa, Vice governor of Central bank.
However, commercial banks sustain an argument that agriculture is still a no go zone.
They argue that 70 percent of agriculture in Rwanda is subsistence -based and rain fed which makes it risky for commercial banks to finance.
“I am sure banks will be quite happy to lend to commercial, technology based non-rain dependent agriculture,” Maurice Toroitich, Chairman of the Rwanda banking sector association told KT Press.
In Sub Saharan Africa, agriculture receives only $7 billion in financing compared to $400 billion required in the next decade and $ 1000 billion by 2030.