An irrigation project in Kirehe, Eastern Province- loan with 8% interest could be the most affordable ever
The Ministry of Agriculture and Animal Resources through Commercialization and De-risking for Agricultural Transformation (CDAT) project has announced the long-awaited news for farmers to access an easy loan, which will be payable with an interest rate of only 8%.
Access to the proclaimed loan was announced during a meeting with representatives of framers in Gisagara District, on February 13, and is expected to start by the beginning of March 2023, to help farmers increase production.
CDAT is a US $ 300 million project that was launched by the Government of Rwanda through the Ministry of Agriculture and Animal Resources, together with the World Bank. It targets to increase the use of irrigation and commercialisation, among producers and agribusiness firms across the country
Ernest Uzaribara, the Acting Head of program said: “This project aims to help farmers access loans at a low interest rate. Usually, banks offer loans at an interest rate between 23% and 24%, but in this case, farmers will access loans at 8%, which stands the lowest.”
According to Uzaribara, the ceiling of accessible loan is at Rwf 600 million, to be offered to individual farmers, cooperatives or companies, wishing to boost their agribusiness/ increased production, procurement of agricultural machinery, transport vehicles, putting up storehouses, green houses, processing plants, among other facilities.
Farmers are required to come up with well prepared project proposals, with clear targets, since the objective of this project is to promote agribusiness, by looking first at existing challenges.
Transfer of loans shall be through the Development Bank of Rwanda (BRD), then to banks and SACCOs at an interest rate of 4.5%, finally farmers accessing the same loans at an interest rate of 8%.
Théoneste Ndanga, a member of Coproriz said that he has never acquired a loan from SACCO because of high interest rate. This time he plans to be among the first to apply for the CDAT loan since access and payment are easy.
He said: “I believe that since loan repayment period under this project is between one and three years, it gives ample time to meet the deadline.”
Besides providing agricultural loans, CDAT project supports other related activities, since July 2022, for a period of five years. The activities include irrigation schemes, fighting soil erosion and other activities that offer jobs to the local community.
Through Business Development Fund (BDF), this project also looks forward to offering matching grants of up to 50%, on a chain of value additional work, including safeguarding agricultural harvest, ICT in agriculture, use of green houses, among others.
There is also an additional grant ‘Innovation Challenge Fund’, meant for youth and women, where they are able to access funds up to 70%, based on what kind of agricultural innovation one presents. This fund will also be accessed through BDF between 2023 and 2024, after setting guidelines.
