Smallholder Farmers Advised to Operate Under One Formal Group

Majory of country's smallholder farmers, accounting for 74 per cent, are not members of any formal group, something which hinders them to access loans from financial institutions.
This alarming data from a new research report of the National Survey and Segmentation of Smallholder Farmers conducted by the Consultative Group to Assist the Poor (CGAP) pushed the stakeholders yesterday to launch an initiative, dubbed 'AgriFin Accelerate' which is geared towards accelerating the access and use of digital financial and informational services among the farmers.
The new report indicates that 37 per cent of small farmers borrowed money from friends or family members, while only 4 per cent accessed loans from microfinance institutions, 3 per cent from banks and 2 per cent from Saving and Credit Cooperative Societies (SACCOS).
The report has further established that an average of 90 per cent of the smallholder farmers do not have personal accounts registered in their names. In the wake of this, it is expected that AgriFin Accelerate initiative would help close the gap in access to financial and information services experienced by the group, especially women and youth.
The US 25million dollars ( about 53.75 bn/-), is a six-year initiative which is expected to benefit at least one million smallholder farmers in Kenya, Tanzania and Zambia. In Tanzania, more than 78 percent of the population is engaged in or derives its livelihood from agriculture-related activities.
Chairperson of Board of Directors of the National Network of Farmers Groups in Tanzania (MVIWATA), Ms Veronica Sophu, said smallholder farmers in the country face a range of challenges, including obtaining and paying for quality seeds, fertiliser and pesticides and transporting goods to the market.
"Farmers want access to credit, savings and loan products that are currently out of reach or do not exist," Ms Sophu said, adding: "mobile money services are a powerful tool to bring the unbanked and those using only informed financial services into formal financial sector."
Chairman of Diligent Consulting Ltd, Prof Andrew Temu, argued that a trend of agriculture financing was still very low. "We are not having financial institutions diverting their services to rural areas, mainly due to poor physical infrastructures like electricity," Prof Temu said.
He said the bank should now have a role to play, not necessarily establishing branches in rural areas but rather capitalise on digital finance. The report says as in many developing countries, however, the demand for agricultural financing largely remains unmet.

Smallholder Farmers Advised to Operate Under One Formal Group Smallholder Farmers Advised to Operate Under One Formal Group Reviewed by on 10:46:00 PM Rating: 5

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