Bank Of Kigali Sets Aside Ksh 17.9 Billion Funding For Farmers

By David Indeje / Published July 31, 2023 | 1:21 pm



Bank Of Kigali

The Bank of Kigali has committed to providing Sh17.9 billion worth of loans to farmers and businesses across the agricultural value chain.

A portion of the funding will be provided at a concessionary interest rate of as low as 8% per annum, which is less than half of the average lending cost of between 16% and 18%.

The Bank of Kigali CEO, Dr. Diane Karusisi, said the funds, to be disbursed over the next five years, are intended to accelerate the ongoing transformation from subsistence to commercial farming in Rwanda and across East Africa.

Related Content: 34 Crops You Can Plant In Kathiani, Machakos, Including Maize Varieties

BK Group is listed on both the Rwanda Stock Exchange and the Nairobi Securities Exchange (NSE).

“The agriculture sector is heavily underfunded yet it comprises the biggest portion of our GDP. This fund is expected to scale up commercialization of farming by providing affordable loans to farmers and agribusinesses,” said Dr Karusisi.

Banking data in Rwanda shows the agriculture sector accounts for only about 7% of the industry loan book, yet it comprises 30% of the Gross Domestic Product (GDP).

The absence of reliable financial data has been a major hindrance to the flow of funding to the agricultural sector, as banks lack tools to assess farmers’ creditworthiness.

The Bank of Kigali CEO however says this is now gradually changing, as agricultural value chains such as tea, coffee, maize, rice, and dairy become more mature.

Related Content: 49 Crops You Can Plant In Karachuonyo, Homabay County

Under the Commercialization and De-risking for Agricultural Transformation (CDAT) project, borrowers will get loans at an interest rate of 8% for 90% of the loan applied while the remaining 10% will be advanced at commercial rates.

The second tier, Economic Recovery Fund II(ERFII), will see farmers and agro-processors get 60% of their loan application at 8% and the remaining 40% at market rates.

“There is an option to access full funding at 8% per annum depending on the value chain and the size of the agribusiness,” said Dr Karusisi.

Bank of Kigali reported a 15.1% growth in net profit to KSh7.1 billion for the year ended December 2022.

The profit increase was mainly driven by a 14.5% growth in the loan book to KSh135 billion.

Related Content: 45 Crops You Can Plant In Gatundu South And Make Some Money




About David Indeje

David Indeje is a writer and editor, with interests on how technology is changing journalism, government, Health, and Gender Development stories are his passion. Follow on Twitter @David_IndejeDavid can be reached on: (020) 528 0222 / Email: info@sokodirectory.com

View other posts by David Indeje


More Articles From This Author








Trending Stories










Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE



ARCHIVES

2024
  • January 2024 (238)
  • February 2024 (227)
  • March 2024 (190)
  • April 2024 (133)
  • May 2024 (70)
  • 2023
  • January 2023 (182)
  • February 2023 (203)
  • March 2023 (322)
  • April 2023 (298)
  • May 2023 (268)
  • June 2023 (214)
  • July 2023 (212)
  • August 2023 (257)
  • September 2023 (237)
  • October 2023 (266)
  • November 2023 (286)
  • December 2023 (178)
  • 2022
  • January 2022 (293)
  • February 2022 (329)
  • March 2022 (358)
  • April 2022 (292)
  • May 2022 (271)
  • June 2022 (232)
  • July 2022 (278)
  • August 2022 (253)
  • September 2022 (246)
  • October 2022 (196)
  • November 2022 (232)
  • December 2022 (167)
  • 2021
  • January 2021 (182)
  • February 2021 (227)
  • March 2021 (325)
  • April 2021 (259)
  • May 2021 (285)
  • June 2021 (272)
  • July 2021 (277)
  • August 2021 (232)
  • September 2021 (271)
  • October 2021 (305)
  • November 2021 (364)
  • December 2021 (249)
  • 2020
  • January 2020 (272)
  • February 2020 (310)
  • March 2020 (390)
  • April 2020 (321)
  • May 2020 (335)
  • June 2020 (327)
  • July 2020 (333)
  • August 2020 (276)
  • September 2020 (214)
  • October 2020 (233)
  • November 2020 (242)
  • December 2020 (187)
  • 2019
  • January 2019 (251)
  • February 2019 (215)
  • March 2019 (283)
  • April 2019 (254)
  • May 2019 (269)
  • June 2019 (249)
  • July 2019 (335)
  • August 2019 (293)
  • September 2019 (306)
  • October 2019 (313)
  • November 2019 (362)
  • December 2019 (318)
  • 2018
  • January 2018 (291)
  • February 2018 (213)
  • March 2018 (275)
  • April 2018 (223)
  • May 2018 (235)
  • June 2018 (176)
  • July 2018 (256)
  • August 2018 (247)
  • September 2018 (255)
  • October 2018 (282)
  • November 2018 (282)
  • December 2018 (184)
  • 2017
  • January 2017 (183)
  • February 2017 (194)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (189)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (164)
  • February 2016 (165)
  • March 2016 (189)
  • April 2016 (143)
  • May 2016 (245)
  • June 2016 (182)
  • July 2016 (271)
  • August 2016 (247)
  • September 2016 (233)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (164)
  • April 2015 (107)
  • May 2015 (116)
  • June 2015 (119)
  • July 2015 (145)
  • August 2015 (157)
  • September 2015 (186)
  • October 2015 (169)
  • November 2015 (173)
  • December 2015 (205)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950