Rwandan farmers and agribusinesses are set to benefit from nine new financial products being developed by Savings and Credit Cooperative Societies (SACCOs) in partnership with Kilimo Trust Rwanda to expand agricultural lending, with a focus on regenerative agriculture and renewable energy.
The products are designed to address financing needs across the agricultural value chain, from irrigation and dairy equipment to agricultural transport, storage, agro-processing and value addition.
The initiative was born out of a three-day workshop that brought together SACCOs from all 30 districts to review existing financial products and explore financing options tailored to the needs of farmers, agribusinesses and businesses investing in renewable energy for productive use.
The workshop brought together representatives of the Rwanda Cooperative Agency (RCA), Kilimo Trust Rwanda, the Ministry of Agriculture and Animal Resources (MINAGRI), the National Agricultural Export Development Board (NAEB), the Development Bank of Rwanda (BRD), SACCOs, insurance company SONARWA, agribusiness owners, cooperative representatives and other development partners.
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SACCOs serve nearly six million customers across Rwanda, giving them an important role in expanding access to financial services for agricultural communities. The proposed products emerged from discussions on how SACCOs could adapt their existing loan portfolios to meet the needs of agricultural borrowers, whose financing requirements and income patterns often differ from those of borrowers in other sectors.
Kilimo Trust Rwanda is providing technical support through its experience in agricultural markets, business models and sustainable agricultural development. The organisation works with partners under the Power for Food Partnership, funded by the IKEA Foundation through SNV, to promote regenerative agriculture and the productive use of renewable energy to improve agricultural productivity while reducing pressure on natural resources.
Andrew Gashayija, and the Country Team Leader at Kilimo Trust Rwanda, said the initiative is intended to help financial institutions better understand agriculture as a viable lending sector.
"Lending to agriculture has been very low. Maybe it has increased recently, but it is still among the lowest, probably going up to maybe 6 per cent compared to all the loans that go to other sectors of the economy," he said.
He said low agricultural lending is partly linked to limited knowledge among financial institutions about opportunities in agribusiness.
"Not all of them have agriculture or agribusiness departments. Even those that have them may not really have sufficient knowledge," he said.
The workshop enabled SACCOs to review loan products already available in their portfolios and discuss how they could be adapted or expanded to meet the needs of agricultural borrowers.
Gashayija said Kilimo Trust brought its experience in agriculture and agribusiness to help financial institutions identify business models that can generate returns and support loan repayment.
"We've done studies, we've developed business models for the private sector that have worked. So, we wanted to really bring this knowledge to the banks, so that there is awareness about the existing opportunities in agribusiness, the agribusiness models that exist that can really pay well, even utilise their loans," he said.
The nine financial products which were named and prototyped include; 1) Regenerative Agriculture Investment loan, (2) Ingufu Zisubira loan, (3) Sarura Uhunike Wowe na SACCO loan, (4) Ntwaza-Harvest Transportation loan, (5) Avocado Farming loan, (6) Value Chain Financing loan, (7) Hinga Wunguke loan, (8) Zirakamwa Dairy Equipment Loan and (9) Dairy Investment Capital loan.
The products target investments ranging from regenerative farming practices and renewable-energy technologies to dairy equipment, agricultural sheds, irrigation, harvesting and post-harvest technologies, transport, aggregation, agro-processing and value addition.
Gashayija said the project wants to promote farming practices that protect the environment and soil while supporting farmers' incomes.
"We want to see how our agriculture is done in a way that protects the environment, protects the soils, protects the future of our farming," he said.
The project is also seeking to connect farmers with renewable-energy solutions for irrigation, livestock water supply, agro-processing and post-harvest management.
"The project does the awareness creation, the linkages, the de-risking and also the unlocking and financing through working with the financial institutions," Gashayija said.
He said SACCOs need to understand the different businesses along the agricultural value chain so they can develop financial products that match borrowers' cash flows and investment needs. Farmers may require financing to purchase irrigation systems, while renewable-energy suppliers may need working capital to provide equipment. Businesses producing agricultural inputs such as compost may also need financing to expand production.
The development of specialised SACCO products could make agricultural finance more accessible to farmers whose income patterns differ from borrowers in other sectors.
"Agriculture often involves seasonal production cycles, meaning farmers may require loan repayment schedules that correspond with harvest and sales periods," Gashayija said.
Richard Mugambage, a financial services cooperatives specialist at RCA, said reviewing SACCO financial products is timely because many SACCO customers are farmers and other actors along the agricultural value chain.
"We need efficient agriculture financing for farmers. We jointly devised financial products dedicated to the agriculture value chain. The products go along with de-risking measures and that is where Kilimo Trust came in with tailored products," he said.
He said SACCOs should combine loans with risk-management measures, including agricultural insurance. Solar-powered irrigation, dryers and coolers are also being considered as ways of reducing risks associated with agricultural lending.
Joseph Museruka, Manager of the National Agriculture Insurance Scheme (NAIS) at MINAGRI, emphasised the importance of insurance in managing agricultural risks. He said different agricultural businesses may require different forms of insurance coverage, including additional insurance for some export activities.
SACCOs' expectations
For SACCOs, the proposed products offer an opportunity to expand agricultural lending while responding to the realities of their members' businesses
Phocus Mbitsemunda, Managing Director of Ubumwe Gakenke District SACCO, said the new financial products are timely because 80.7 per cent of Gakenke's population depends mainly on agriculture and livestock farming for their livelihoods.
The SACCO has 19 branches and 178,641 members, with about 51 per cent of its loans going to agriculture and livestock keepers.
He said the SACCO expects the new products to provide repayment schedules that reflect farmers' income cycles.
"Farmers receive income at harvest time, rather than every month. Under our new 2026-2029 business plan, we will continue to introduce repayment arrangements that are aligned with the farming season through seasonal payments," he said.
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Risk-sharing is another priority. Mbitsemunda said every crop or livestock loan at the SACCO is insured and cannot be disbursed without Tekana insurance coverage. The farmer's contribution is deducted from the loan, while the BRD Guarantee also provides additional risk-sharing support.
He said the approach has helped the SACCO maintain a non-performing loan ratio of 1.4 per cent.
The SACCO also wants access to affordable, long-term financing. Mbitsemunda said farmers need more funding than SACCOs can currently provide, particularly for green investments such as irrigation, terracing, drying and storage facilities.
The SACCO expects new products to connect farmers and livestock keepers to markets. For example, milk and egg producers could deliver their products to collection centres, with proceeds deposited into their SACCO accounts and used to repay loans gradually.
The products could also finance cooperatives and collection centres to expand their capacity to receive, cool and process produce, while helping coffee farmers connect with processing factories.
Jean Baptiste Nkundabagenzi, a seed and fertilizer specialist from Agriculture Modernization Directorate in MINAGRI, stressed the importance of conservation and regenerative agriculture alongside increased agricultural financing.
He said the government is promoting conservation agriculture through Food Basket Sites (FOBASI) in all 30 districts.
"We have FOBASI in all districts, which is the reason why SACCOs are important to invest in this scheme as you reach more farmers in the country," he said.
