The government has been encouraging Rwandans to embrace modern agriculture methods for years. However, lack of affordable finance has always hindered this effort.
Farmers continue to decry the high interest on agriculture loans, which hurts efforts towards agricultural mechanisation and increased productivity.
This need was, in fact a major highlight during the recently-concluded 9th Annual National Agriculture Show at Mulindi Grounds in Gasabo District. The show was held under the theme, 'Transforming Agriculture for Shared Prosperity and Improved Livelihoods'.
Most farmers and exhibitors at the show called on policy-makers and banks to avail farmers affordable financing so they can exploit the numerous opportunities in the agriculture and livestock sectors.
This call was re-echoed by the Minister of Agriculture and Animal Resources, Agnes Kalibata, who urged the private sector, especially financial service providers, to intensify sector funding to promote agricultural mechanisation which would, ultimately, improve yields.
Muyango Dave from John Deere, a firm that deals in agricultural equipment, said for the sector to be profitable, there is need for banks to fund farmers to buy quality farming machines, saying most farmers cannot afford them without support from financial institutions.
"Through well-packaged products, like leasing, farmers will be able to engage in mechanised agriculture and use irrigation to increase productivity," Muyango said.
However, this (lack of funding) could soon be history after the Development Bank of Rwanda (BRD), one of the sponsors and exhibitors at the annual agricultural show, unveiled plans to increase funding to the agriculture sector.
According to bank officials, BRD has launched projects aimed at boosting the industry, targeting all its players down to the grassroots.
Alex Kanyankole, the BRD chief executive officer, also re-affirmed the bank's support to financing the agro-processing industries, and animal feeds producers. The move is tipped to boost the country's foreign exchange earnings.
"Agricultural exports promotion is our long primary focus... This is besides the financing for annual coffee campaigns, coffee and tea plantations and tannery operators. We also fund foods and beverages dealers targeting the export market," Kanyankole said.
He emphasised that the intervention will help develop the small agro enterprises (SMEs), and increase agricultural production and ensure sustainable food output in the country.
More investments made Last year, BRD financed 72 projects in the agricultural and livestock sector, with up to Rwf9b, which was 15 per cent of all the approved loans for various areas such as primary agriculture (livestock and crop farming).
"We financed 50 projects involved in poultry, cattle, piggery and fish farming. These projects are expected to increase milk, meat and egg production in the country. They will also promote modern farming methods and increase of revenue generation and purchasing power of farmers," noted Manzi Benjamin, the BRD director for investment.
BRD is in the process of establishing a stand-alone agricultural financing department that will streamline and ensure famers access long-term financing of risky and projects that other banks do not fund.
The bank's interest rates of up to 14-16 per cent compared to the 19-20 per cent average rate in most commercial banks.
"Offering advisory services and technical support and training to farmers remains a core priority for the bank," Kanyankole said.
BRD also offers a variety of guarantee funds to cover the risks of projects that impact of sustainable development. There are several guarantee funds that the bank's clients can have access to.
Several of them are channelled through and managed by the Business Development Fund (BDF). The bank also has financing partnerships with reputable institutions such as the African Guarantee Fund (AGF) and African Solidarity Fund (FSA).