Some of participants at afraca[photo/thestar.co.ke/] Despite the strides made by the African banks in financial service delivery recent being enhanced by digital financial services, credit for farmers has been largely limiting and not quite innovative.
Enterprises and non-governmental organizations seeking to make it easier for farmers to access credit thus find it tricky to find capital from commercial banks. The biggest headache is the risk element of agricultural investments and the short time horizons required for returns.
Many equity investors, therefore, find the returns unappealing so they are quick to shy off, thus leaving low- scale farmers to depend on the small credit facilities within their localities for salvation in time of need. “Only 10 percent of our people can formally access credit and more needs to be done.
Everyone is a stakeholder in this conversation and so we should be sharing and discussing competencies,” says Afraca (African Rural and Agricultural Credit Association) Secretary General, Saleh Usman.
He was speaking during a 40th-anniversary celebrations forum for Afraca held in Nairobi recently. “The replication of ICT and mobile infrastructure model that is strong in some countries should be extended across Africa,” added Usman. Central Bank of Kenya Governor Dr. Patrick Njoroge called for greater investment in technology to improve agriculture. “Impact investment through innovation in our continent could ultimately be a game changer.
“There certainly is a huge gap and need which, if well-addressed, can save and empower a many of our citizens in the value chain of food production. The creditors in this sector thus need to revolutionize financing for rural agriculture which is at the backbone of most African economies,” he said.