17 May 2018

Rwanda: New App to Increase Farmer Funding Through De-Risking Agriculture

BK TecHouse has introduced a new technology platform that will increase funding of the agriculture sector and avoid unnecessary financial loss by farmers.

The platform will improve agricultural productivity by giving lenders assurance that the money they lend will be used exactly for the right purpose, officials at Bank of Kigali's BK TecHouse say.

The technology, dubbed Smart Nkunganire System (SNS), will ensure that farmers comply with recommended best farming practices - such as quality and quantity of agro-inputs - to qualify for the loan; leading to higher quantity and better quality of harvest.

The loans will also be season based with an expiration date in case the farmer does not use it, so that it can be allocated to other investments.

On May 14, BK TecHouse Ltd together with Rwanda Agriculture Board (RAB) and the Private Sector Federation (PSF) held a one-day meeting with the public and private institutions in agriculture as well as beneficiaries of the agro-input subsidy program (Farmers & agro-input suppliers, dealers and distributors) to discuss on the use of the system.

At the meeting, all parties agreed to digitise Rwanda's agro-input, increase efficiency, productivity and transparency while also helping small-scale and large-scale farmers in getting loans and insurances.

Bridging funding gap

In fact, though about 70% of Rwandans live off agriculture activities and contribute to 30% of the GDP, only 7.4% of the total commercial loans were allocated to agriculture (Finscope report 2016).

Addressing parliament on agriculture performance in the country, in April this year, Prime Minister Edouard Ngirente said that among the challenges facing farming sector performance is low investment from the private sector, and low lending to farming sector.

For instance, the premier said that in 2017, total lending to the sector accounted for only 5.2 % of all loans given in the country.

"Our concept is to De-Risk Agriculture!" said Regis Rugemanshuro, CEO of BK TecHouse before adding "we will be happy when the total loans allocated to agriculture get to double digits and the agro-input subsidy programme is completely a cashless and paperless business, as this should lead to significant social economic positive changes in Rwanda."

Rugemanshuro explained that the SNS platform powered with a state of the art big data analytics engine will provide financial institutions, telephone companies and insurance companies with the information needed to issue personalised instant loans and crop insurances with the guarantee that the money disbursed through the platform can only be used to buy fertilisers, improved seeds, pesticides, mechanisation and Small-Scale Irrigation Technology (SSIT).

The SNS platform will also facilitate "contract farming" by linking farmers and post-harvest aggregators to buy from the farmers or cooperatives at harvest.

Rwanda Agriculture Board (RAB) pledged to make sure that famers get genuine seeds, fertilisers, and irrigation equipment while PSF will link up agro-dealers, cooperatives or other possible markets to farmers.

"This will also help PSF create more opportunities and value for its members in the agriculture sector," said Christine Murebwayire, chairperson of chamber of agriculture and livestock at PSF.

According to Egide Gatari, the agriculture input subsidies programme manager at RAB, two million farmers are expected to have registered before July 2018.

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