News Column

Financial Institutions Urged to Extend Wings to Cover Rural Farmers

August 10, 2014

Christopher Majaliwa

PRIVATE Agricultural Sector Support (PASS)--an entity working to stimulate increased growth of private commercial farmers and agribusiness in thecountry want financial institutions to extend wings to rural farmers and offer loans to make such activities more sustainable.

Acting Managing Director, Mr Killo Lusewa told the 'Daily News' that there had been a misguided mindset amongst financial institutions that issuing loans to small scale farmers was a risk as repaying the loans would likely remain uncertain.

He said that it was high time such mindset was changed and the institutions had to ensure that they equally reach the farmers all over the country due to the fact the lack of capital has been repeatedly cited as one of the factors leading to poor productivity.

"These financial institutions have reached to the extent of even terming small scale farmers as defaulters even before loaning them.

I think it is high time the mindset was changed as what is largely needed is to ensure that the farmers get adequate knowledge on how they could use such loans to improve productivity," he noted.

He pointed out that to ensure efficiency in the agricultural sector; his organisation was working in collaboration with banks to enable individual farmers and companies get loans for viable investment.

Mr Lusewa noted that PASS was committed to ensure that it provides business development and financial services to small and medium agribusiness entrepreneurs through linkage to financial institutions and business advisory services.

He explained that in the period of about 13 years, PASS has helped aboutv 30,000 farmers in the country to secure loans from various banks and it was still their determination to ensure they reach even more farmers.

He added that about 166bn/- in the period of between 2000 and 2013 was loaned to such farmers and the amount has been recovered by over 90 per cent thus showing that farmers had made profit from such loans.

He mentioned regions which benefited from the loans as Iringa, Mbeya, Kilimanjaro, Ruvuma, Rukwa, Mtwara, Mwanza, Lindi, Arusha, Manyara and Morogoro.

"Despite offering loans to farmers in these regions, PASS has also helped over 1,200 groups of coffee farmers to be in a position of producing more quality products which is even able to compete in the international market," he added.

He pointed out that PASS efforts in improving agricultural sector in the country has also helped increase sugarcane production from 10 tonnes per acre in 2002 to between 40 and 65 tonnes per acre in 2013.

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Source: AllAfrica

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