Alliance for Green Revolution in Africa (AGRA) has extended at least US$500,000/- (about 800m/-) to help small scale farmers’ access to loans and the understanding of financial institutions of the projects.
According to AGRA, the two-year pilot project titled Financial Literacy Training and Access to Financial Services Project to be implemented immediately is intended to benefit at least 4000 farmers, 200 farmer group representatives, Small and Medium Scale Entrepreneurs, Agro dealers, banks and other financial institutions in Morogoro Region.
Speaking at the launch of the project on Saturday, AGRA Associate Programme Officer, Kithinji Boore said the project is meant to help the small scaled farmers get access to loans and at the same time help financial institutions understand the farmers’ projects and be in a position to lend them.
“AGRA believes that small scale farmers in Tanzania can feed the whole nation and remain with a surplus. However they lack financial literacy and hence are unable to produce as much as they can. If they can have access to loans they can overcome poverty. Therefore, we have set aside at least US$500,000 for a pilot project in this region and another in Kenya,” said Boore.
According to AGRA, the farmers in Africa including Tanzania are regarded by bankers as the most risky group to lend to, “but with the training more and more shall be accepted”.
He said in most cases farmers who access bank loans are the large scale ones and yet the majority – and major producers – are small scale farmers and hence the need to turn around things.
The Morogoro-based Magadu Entrepreneurships and Business Training Institute (MEBTI) is to implement the project in the country but in collaboration with other international institutions including Rural Finance Knowledge Management Partnership (KMP), the International Fund for Agricultural Development (IFAD) and African Rural Agricultural Credit Association (AFRACA).
Managing Director for MEBTI, an institution that is to offer the training to the farmers, Prof Lascelles Chen, said his organisation will work hand in hand with the graduates from Sokoine University of Agriculture and Nation Network of Farmers Groups in Tanzania to ensure that the project becomes successful.
“We shall first identify at least 40 trainers who will have to reach 4000 small scaled farmers in different locations. We are also targeting that 200 representatives from the farmer groups should be trained. In addition, 80 financial institutions will be trained on how to lend to the farmers and 50 agro dealers will be facilitated to access bank loans. As per manuals that we have, each group will have different materials to learn from,” said Chen who is also the founder of the institution.
In addition, he said some 70 business plans for the farmers will be formulated by the end the two years.
Chen applauded AGRA for singling his institution to implement the pilot project that might be replicated to other regions.
For his part, AFRACA General Secretary who was the chief guest, Saleh Gashua, said since small scale farmers are the majority and they produce more, the only way to come out of poverty is to ensure that such group is supported.
“We cannot talk about overcoming poverty if such a group does not have access to loans so as to produce more,” said Gashua.
For her part, Programme Specialist for AFRACA, Millicent Omukaga, promised support to MEBTI during implementation of the project.
And Executive Director for MVIWATA, Stephen Ruvuga, applauded the great work that is done by AGRA in the country.
“We very much recognise the tremendous job by AGRA in agriculture sector. It has done a lot ranging from market research to access to improved seeds. And in this project, we would like to assure MEBTI whenever it needs our assistance, our doors are open,” said Ruvuga. The ceremony attracted a number of farmers and their groups.