Theophile Hakwiyimana explaining the “Kungahara na BK” loans with an interest rate of 8%, a six- and 12-month repayment period.
This was announced on Tuesday during a farmer’s outreach forum conducted by Bank of Kigali (BK), that was aimed at sensitizing cooperatives members on the “Kungahara na BK” product.
The “Kungahara na BK” is a specialized financing facility designed to financially empower cooperatives in the agribusiness sector. In this product, BK provides loans of up to Rwf50 million to cooperatives that grow rice, tea and maize to repay within 12 months with produce insurance as collateral.
These forums started last week in the Southern Province where the bank held sensitizations sessions with maize farmers’ cooperatives from various districts.
The campaign reached the Eastern Province on November 26, 2024, and is expected to go across the country reaffirming the BK’s commitment to lead other banks in increasing agricultural financing and creating tailor-made agricultural products.
Theophile Hakwiyimana, a Bank of Kigali official, in the department of Agriculture and Livestock, Eastern Province said that this department, established for two years, has helped farmers obtain loans in a short time and at low interest rates.
Specifically, under the Kungahara na BK, Hakwiyimana stated that they will collaborate with cooperatives dealing in maize, rice, coffee, potatoes, tea and dairy farmers to provide them with quick loans.
Hakwiyimana said that they will help farmers and livestock cooperatives to obtain loans at an interest rate of 8%, during the planting, harvesting, collecting and storing produce, irrigation equipment among other activities.
“We have loans for farmers to plant or harvest, to collect produce. There are also cooperatives that need vehicles to take their produce to the market, to store crops, to obtain tractors. These are loans that we provide quickly and at low interest rates,” Hakwiyimana said.
The president of KOHIKA maize farmers’ cooperative in Nyagatare district, Jean Chrysostome Twiringiyimana said that they used to acquire regular commercial bank loans and repay at high interest rates.
Twiringiyimana stated that finding a bank that offers loans at low interest rates, would help them improve their agricultural activities.
“Financial services were a burden to us because often the application process took three months, but here they promised us three weeks,” Twiringiyimana said.
“Also, regarding infrastructure, they (BK) assured us that we would get a loan for drying and storage facilities. So, if we are honest with the Bank, we can further develop our agriculture.”
Bank of Kigali has taken a long step towards financial inclusion for farmers in Rwanda.
Eugene Ntaganda, the president of KOPETIBAJU Cooperative, which grows maize in Juru Sector, Bugesera district, said that since BK has trusted and agreed to work with them, they would get good yields and sell on good market prices.
“Compared to other banks that we worked with, here (at BK) there is something new because they will give us long-term loans that we pay twice a year. This will allow us to store our produce and sell it when a good market is available,” Ntaganda said.
The Bank of Kigali also states that besides cooperatives, which will be granted loans after providing collateral, those working in the seed industry will not be required to provide any collateral.
IKOFI improves producers’ financial access and makes it easier for producers to attain loans and other financial services.
Such incentives, among many BK led products (such as the “IKOFI”, a revolutionary universal wallet that offers financial services with focus on Rwandan farmers) will enable Rwanda to improve agricultural financing, which is part of the Second National Strategy for Transformation (NST2), a 5-year strategy (2025-2029).
This is against the fact that even when agriculture remains the backbone of Rwanda’s economy, and 70% of people live off agriculture activities, contributing to 30% of the GDP, only less than 6% of the total commercial loans in Rwanda is allocated to this sector.
Primary reporting by: Emmanuel Gasana Sebasaza
