Dairy farmers have reason to smile after Kenya Commercial Bank Rwanda unveiled a new loan product aimed at improving the sub-sector.
Alex Bizimana, the KCB Rwanda agri-business department manager, said the credit facility will help farmers improve the productivity of the dairy industry and the milk supply chain.
Bizimana was speaking at the launch of the facility in Rwamagana District in the Eastern Province on Thursday. The function was attended by members of various dairy farmers' co-operative societies.
Bizimana pledged the bank's support to help farmers get better milk buyers.
Dairy farming is the major source of livelihood for most people in the Eastern Province, especially small-holder farmers, with over 80 per cent of rural households depending on the sector.
"Our primary focus is to help increase milk output... This credit facility will support long-term, as well as short-term investments in the dairy industry through funding tailored to the sector's needs," Bizimana said.
He noted that when farmers' access sustainable sources of finance it boosts their negotiating power and reduces costs.
"The loans will enable farmers to buy vehicles to transport milk to processing plants. This will allow farmers to transport milk at any time of the day instead of waiting for dealers to collect it," he added.
The Rwamagana District vice-mayor in charge of economic affairs, Francisca Mutiganda, said as the economy improves and incomes grow, demand for milk and milk products will rise.
She noted that to meet this demand, dairy farmers must increase milk production.
"To meet the growing demand for milk and accelerate dairy sector development in the country, it is necessary to have such assurance of financial support. Besides improving cattle productivity, it strengthens milk marketing infrastructure at the village level and enhances milk processing capacity," she said.
Joseph Gasasira, a farmer in Rwamagana District, said the bank's initiative was a timely boost that will benefit a number of farmers.
"Dairy farming is a costly activity that requires reliable income to operate profitably. For instance, buying farm inputs, medicine and transporting milk calls for one to have sustainable funding. So if KCB has created a facility for dairy farmers, that is great news," he said.