Access to finance for Potato actors in Rwanda Context Rwanda does - - PowerPoint PPT Presentation

Access to finance for Potato actors in Rwanda

• Rwanda does not have a stand-alone agricultural financing policy;
• The framework that is close to governing Rural and Agricultural

Financing is the Rwanda Financial Sector Strategy (2013-2018) which indicate different aspects of agricultural financing strategy including:

• Rwanda will promote access to finance by enacting a leasing law

that will enhance lenders ability to collateralize long term credit for assets ;

• Banque Rwandaise de Developpement (BRD) is expected to

continue expanding credit guarantee through Business Development Fund (BDF) ;

• Increase Agriculture finance through commodity value chain

financing, micro insurance and mortgage financing

• According to this strategy, MFIs and SACCOs will be

strengthened while the 430 Umurenge SACCOs will be consolidated into 30 district SACCOs.

Context

• A number of financing programs have been implemented

under the country finance strategy framework: Rural Investment Facility (RIF II) Project for Rural Income through Exports (PRICE) Post-Harvest and Agribusiness Support Project (PASP) Agricultural Guarantee Fund SME Guarantee Fund, and Sustainable Credit Guarantee Scheme

Cont’

Constraints for Actors in the Potato Value Chain Face to access to finance (farmers)

100% 100% 80% 80% 60% 20% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

For traders lack of collateral, high lending interest rates, low financial and business management knowledge, strict bank requirements

Financing opportunity for traders :

• Heavy cash requirement for

purchase of the trading stock

• Large transport trucks with a

capacity of 5 to 10 Metric Tons (MT), and

• Material and equipment for

instance weighing scales and packaging sacks

• Intervention needs in terms of

financial services for farmers

Business opportunity for financial institutions

100% 100% 60% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Inputs Storage Land

Comparison of Need and Available Products

Items Financial Institutions

Capital Overdraft, Line of Credit, PL / Contract Financing Transport Leasing loans Storage/ Address Asset Financing / Construction Loan Strategy: ‐ Strengthening farmers organizations and management structure; ‐ Build Linkage between actors along the potato value chain and financial institutions ‐

Development of new financing products Processor/Transformation Plant Financial Solution transaction flows