Africa Governments Frustrated by Weak Farmer Credit Schemes

Though some African governments have invested significantly in agricultural credit schemes, weak oversight roles and interest rate distortions undermine their performance. This is because commercial banks are reluctant to effect borrower friendly terms demanded by governments due to internal management hurdles and limited sensitisation within the farming community. The high interest rates were mostly blamed on steep administrative costs incurred by participating banks that rendered the loans very risky in the market contrary to government expectations. Read more here.
Bernard Busuulwa

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Small-scale agriculture should be seen as a business

Speaking in Cape Town, Dr. Kanayo Nwanze, president of the International Fund for Agriculture Development (IFAD), said impoverished rural people want opportunities to enter into economic activity. “What is gratifying for me is that a few years ago you would not hear people talking smallholder agriculture as a business. At the World Economic Forum on Africa, I heard over and over again where top government officials and the private sector have come to recognize that global food security cannot be achieved without the engagement of smallholder agriculture. I think that is the message: governments should invest in agriculture as a business and create the environment for smallholders to enter into economic activities that are profitable.” Read more here.
Staff Writer

Banks coaxed to lend more to agriculture

Kenya’s Ministry of Finance has launched a programme in collaboration with the International Fund for Agricultural Development (IFAD) aimed at spurring lending to the agricultural sector. IFAD has extended a grant-loan of $29.31 million to Kenya to provide better access to financial services, increase incomes, and improve production and outputs in the rural smallholder farm and off-farm sectors. Commercial banks limit lending to the agricultural sector due to perceived high risks associated with it, which hampers smallholder farms’ efforts to increase productivity. Read more here.
Michael Karanja