Where small farmers have access to finance credits
By Gloria Iribagiza
Many small scale farmers especially women in the agricultural sector have had challenges with accessing credit to improve their farming output. As a result many have relied on meager harvests throughout the planting seasons and this has affected their livelihoods and those of their families.
Rwanda is largely an agro-based economy and over 70% of its women are involved in the agriculture sector. In order to jump out of the vicious cycle of poverty and go up the value chain, there is a need for them to have basic knowledge about better farming methods as well as a basic understanding on financials. The lack of the latter is one the major barrier for women in agriculture seeing as, even when they have reasonably large harvests, the lack of financial literacy has hindered the proper management of their outputs hence, limited profits from their hard work.
In line with this, ‘Sarura’ a loan scheme by Bank Populaire du Rwanda Ltd, has proved to be successful in empowering women to; think outside the box, learn to save and access credit to boost their agri-businesses. Greater market value for farm produce Sara Tumukunde is one beneficiary of BPRs Sarura project in Kirehe District, in the Eastern Province of Rwanda.
At 28 years of age, she belongs to a local cooperative called, ‘Ibyiza Birimbere’ that comprises of 100 members. Tumukunde joined the cooperative six years ago. Around that time, Tumukunde, who specializes in farming maize and beans, says she had big plans for her farming business. “Because of the inadequate harvests, I had challenges supporting my family and children’s education,” Tumukunde said,
“I only made a maximum profit of Rwf1700 from the few sacks of produce I sold after a season. Considering the amount of time and energy invested in the planting and harvesting, that was very little money. It was a real challenge selling my harvest on the market.”
When Tumukunde heard about BPRs new product, she applied to be among the pilot beneficiaries of the project. She saved Rwf500,000 and accessed a total sum of Rwf1.5M. As part of the Sarura package, she received financial literacy training through her cooperative and learnt better farming methods that she implemented and used on her 35m by 80m plot of land.
“I have benefited greatly from the loan and I am happy to say that I produce an average of 3tons of beans and 6tons of maize in one season and I now make an average profit of 2,500 per sack,” Tumukunde says.
Additionally, Tumukunde’s success story was a great lesson learnt by other members of her cooperative 12 of whom followed suit and applied for the Sarura loan.
“My plan is to start trading on a larger scale. I hope to make field visits to other large scale farming cooperatives in other parts of the country whose members are successful so that I can learn from them,” she says.
“Up until the year 2000, I used to practice mixed cropping and planted every crop without a plan on the same piece of land. I always had a pathetic harvest year in and year out. However, when I joined COAMV cooperative, I learnt how to farm better,” she says.
Even with this new found farming knowledge, Nyirabakunzi says she had several limitations on my harvest. It was not until she heard about the Sarura loan project last year, that she too saved up Rwf500,000 in a period of six months and was successfully granted three times that amount to invest in her farming business.
“Before being part of Sarura, I had no capacity to maximize
outputs in the half hectare of land I had,” she says. “When I
acquired BPRs Sarura loan, I was able to buy quality seeds,
employ more workers, and I felt equipped to plant within the seasons.”
Irish potato farming is a delicate and precise practice which when done wrong, especially on a large scale, leads to significant losses, explains Nyrirabakunzi. Together with my workers, we spend one week digging the land which is already terraced and prepare it for planting, one week planting the seeds and as the plants grow, we carefully weed and after three months, we harvest. Nyirabakunzi was able to hire 30 workers after getting the Sarura and as of April 2013, she harvested 10 tons of Irish potatoes on the half hectare of land she owns—a first in all her life farming.
“From the profits, I was able to pay off the remaining loan
amount, and save enough and can’t wait to apply for another Sarura loan,” says an excited Nyirabakunzi.
Nyirabakunzi is one of the 15 members of COAMV (Cooperative yA’bahinzi Mukarere ka Virunga), a cooperative that specializes in maize and Irish potato farming in Musanze District. Married with eight children studying in primary, secondary and TVET schools, Nyirabakunzi says she feels like she is on the path to prosperity.
“I encourage other farmers to work hard and improve their
status. We Rwandan farmers should stop complaining and
waiting for free handouts, this doesn’t help. From the little you have, endeavor to save and join a cooperative where you can acquire better farming practices and financial management skills which will result in greater crop returns,” Nyirabakunzi advises.
These products have included Home loans, Trade Finance, Personal Banking, Lease Financing, Long Term Investment finance, syndicated loans and Online/Mobile Banking. BCR which is among the top five largest tax payers in Rwanda has received a number of accolades, including RRA’s recognition for being the first bank to successfully implement electronic Tax payment services (Bcr eTax). Internationally, the Global Finance recognised BCR as the Best bank in Rwanda, 2013.
‘Sarura’ HARVESTING farmers’ potential
Arnold Tijdens the Agri Project Manager at Banque Populaire du Rwanda Ltd (BPR) says the new product was developed for small holder farmers who would like to purchase inputs on credit.
The product “Sarura”, which means harvest in Kinyarwanda, Tijdens says is primarily based on savings. “The idea is that the farmer saves for their own loan to support inputs like seeds, pesticides, and labor. Once they have saved a certain amount BPR will triple this amount based on the input need of the customer,” Tidjens said.
For example if a farmer has saved Rwf500,000, they can obtain a loan of a maximum amount of Rwf1.5M. “It concerns relatively small amounts and the loan process will be fully automated to reduce the processing time for the farmers. It allows customers to start dealing with a bank and stimulates them to save for their own benefit,” Tidjens further explains.
“The product has been very well appreciated by the first group of farmers who were part of the pilot phase. Before enrolling into the project, they didn’t have access to finance due to the fact that most banks require fixed collateral that most small scale farmers don’t have,” he explains.
The ‘Sarura’ project is implemented in such a way that it’s easy for farmers to pay back. According to the bank, the tenor of the loan aligns with the crop seasons and repayment takes place after harvest and sales of the agriculture produce.
“The product underlines BPR’s commitment to the agricultural sector and will be rolled out in the coming years throughout BPR’s large network of (sub)branches.” Tidjens concludes.
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