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

Access to finance for Potato actors in Rwanda

Context • 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.

Cont’ • 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

Constraints for Actors in the Potato Value Chain Face to access to finance (farmers) 100% 100% 100% 90% 80% 80% 80% 70% 60% 60% 50% 40% 30% 20% 20% 10% 0% For traders lack of collateral, high lending interest rates, low financial and business management knowledge, strict bank requirements

Business opportunity for financial institutions Financing opportunity for • Intervention needs in terms of traders : financial services for farmers • Heavy cash requirement for 100% purchase of the trading stock 100% 100% 90% 80% • Large transport trucks with a 70% capacity of 5 to 10 Metric Tons 60% (MT), and 60% 50% 40% • Material and equipment for 30% instance weighing scales and 20% packaging sacks 10% 0% 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