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Input Credit Scheme Strengthens Farmer Linkages to Agro-dealers
Agro-dealersprovideinputsand loanstofarmerstoimprove production
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With the current low production of key crops in Rwanda, the agricultural productivity dependsonaffordability and accessibility of agriculture inputs including seeds, pesticides, fertilizer that are essential forimproving yield and raising incomes (AGRA, 2013). Unfortunately, farmers incur significant upfront investment in agro inputs before they generate revenues to recoup preseasonal expenses. Without access to finance, poor farmers are exposed to perpetual sub-optimal yield and low revenues.
To bridge the gaps in the supply finance, Hinga Weze set up a pilot input credit scheme and later scaled it up to link more agro dealers to farmers to boost their productionand incomes.This is in line withpart ofHinga Weze’s goal to sustainably increase smallholder farmers’ income and increase the resilience of Rwanda’sagriculturalandfoodsystems.
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Funded by USAID, Hinga Weze has enrolled 318 agrodealers in 10 targeted districts into the scaled up scheme to gain technical knowledge on agrochemical regulation, climate smart agriculture, nutrition-sensitive agriculture and product knowledge in pesticides, fertilizers, and lime. They were also given skills in business record keeping, warehousemanagement, and marketing strategies to be able to give good services and products to farmers who were able to double their harvest.
Through the model, agro dealers are also linked to financial institutions that have so far assisted 79 agrodealers to access loans worth $277,742. Eleven of the agro dealers from Karongi were assisted to access loans from banks and SACCOs worth $21,019 (19,800,000 RWF), and were able to avail input on credit to farmers, who, in turn, were able to repay upon harvest. In the last three months, the scheme assisted 1,838 farmers to access agro inputs worth $38,419.
“We expanded our business by adding inputs that farmers need,” observed Ange Ngabonziza, an agrodealer. Creating inroads for smallholder farming to prosper may rely on such an input credit scheme that link farmers to access finance and inputs to improve agriculture production.
