Experts and practitioners in rural and agriculture finance have committed to increase finance in the sector as the international conference on best practices in rural and agriculture concludes in Kigali.
Participants agreed to come up with best ways for access to finance, increase production and cutting down the cost of production in agriculture.
Closing the conference, Dr. Monique Nsanzabaganwa, Vice Governor of the Central Bank of Rwanda thanked participants for working hard to learn as much as possible. "Everyone should be eager to learn because everyone has something to do better than what they have been doing".
She called on financial institutions to overcome fear of risk while financing the agriculture sector.
"Agriculture should not be thought of as a risky business. We should know how to deal with risk and do risk management instead of risk avoidance. I see global brands that are in this sector and are making a lot of money. We need to collaborate, coordinate and come up with innovations to harness that potential including using technology" she said.
"There is need for capacity building and technical assistance to financial institutions that are eager to learn. There is need for that package for financing agriculture to succeed. We also need proper monitoring mechanisms and hold each other accountable," she ended.
According Saleh Usman Gashua, AFRACA secretary general, only less than 5 per cent of rural communities in Africa have access to formal finance but hopes the conference will help to upgrade the trend.
"200 delegates from 35 countries across the globe attended the conference. This shows the confidence and commitment they have in the field of agriculture," he said.
"We have been here to learn from each other and go back with a take away and adopt it. For us to attract financial institutions there is need to address policy, political will, access to finance, capacity building, environment, coordination, among other constraints that hinder agriculture development," he said.
Alex Kanyankore, CEO of Development Bank of Rwanda said there is need to change mindset towards agriculture finance because bankers and financiers tend not to think innovatively when it comes to agriculture finance.
"It's also paramount to invest in public education to educate farmers and bankers," he said.
On the first day of the conference, Kanyankore revealed that Development Bank of Rwanda will, in the next five years, invest Rwf 80 billion to support agro processing industries and post harvest management.
Experts called on governments to come up with policies that facilitate financiers as well as recommended that countries should replicate practices from others but also be sensitive to local challenges and contexts.
Experts presented and discussed about the state of rural and agricultural finance in Africa, among other subjects.
Rasmane Ouedraogo, agriculture expert from Burkina Faso shared the state of agriculture finance in Western Africa.
He said market pre-financing system in rural areas and mutual deposits, among other programs, have been significant although low penetration of microfinance in the region remains a challenge.
According to him, there is need for better planning and allocation of finances to attract the financiers into agriculture sector.
Henry Oketch, rural finance specialist in Kenya, presented the state of agriculture finance in Eastern Africa region.
"If we want to scale up agriculture finance, we need to first deal with climate change. Few countries are self-sufficient, they are exporting food. Eastern Africa is facing high population growth. This is challenging because the higher the population density, the lower the production. There should also be micro venture funds to reach out to rural farmers." He said.
He showed that Rwanda has the best financial access to rural areas due to cooperatives that he said have more customers than commercial banks while Kenya has the highest provision of credit access.
Dr. Livingstone Byamungu, the chief investment officer of Development Bank of Rwanda, said there are different agriculture practices from which others can learn.
According to him, there has been as change of radical mindset among farmers. "Since 2005, farmers have been switching from subsistence agriculture to commercial agriculture. Farmers can calculate and know what to invest and what the return will be.
Land registration has also been critical in rural development and access to finance. Many people have land titles that help them get loans, presenting their lands as collateral.
"Crop and livestock intensification program, since 2007, resulted in market-oriented agriculture. For instance, maize produce was increased from 5 tons per hectare, ten years ago, to 25 tones currently. Milk produce for one cow increased from 2 litres per day to 20 litres. This made the private sector view agriculture as productive sector," he said.