Agriculture in Burundi Needs Access to Finance
The development of the rural agricultural sector in Burundi must include the facilitation of access to finance for rural activities. A prerequisite for the development and modernization of the sector. An interview with Kamaranyota Egide, who works on financing value chains in the MAVC (Microfinance, Agrifinance and Value Chains ) program of ICCO Cooperation in Burundi.
Can you explain what is “access to finance”?
By access to finance, we mean access to financial products by the population in general and that of the rural population in particular. For this we need to mobilize and support microfinance institutions (MFIs) to develop rural financial products and services that meet the needs of smallholder farmers.
What do you do to improve access to appropriate financial services?
ICCO Cooperation has forged 13 partnerships with MFIs in Burundi and of course with RIM, the MicroFinance Institutions Network.
On the one hand these partnerships have the task of strengthening the sector’s capacities. With the RIM, we have a plan of capacity building of the MFIs agreed. The beneficiaries of our trainings are the agents of the MFIs which in turn duplicate them with the rural population such as smallholder farmers. These are the potential customers of the MFIs.
The other approach is to increase the reach of financial products and services in rural areas. That is, MFIs’ branches are open in rural areas and agents are also deployed in rural areas to be closer to the population.
Is it possible to hit your targets in a context where savings, or possession of a bank account are often considered as the preserve of a certain category of the more affluent population?
Indeed, it is a long-term activity, smallholder farmers are not necessarily receptive to change their mentality. Our approach is continual and permanent. In addition, the population understands the need to open accounts and save. It’s better than keeping your nest egg at home. Moreover, the movements operated on the accounts allow access to credits.
Financial services imply that there are financial products that are adapted and accessible to the rural population. What are these products?
ICCO has developed several financial products in collaboration with MFIs. You can think of:
- Solidarity lending
- Warehouse receipt
- VSLA (Village Savings and Loan Association) connection to MFIs
- Financing of value chains
- Development of distribution channels: Point of Sale (POS), mobile banking
In addition to these financial products, ICCO Cooperation has collaborated with MFIs in the analysis of social performance management, focused on client protection. What would that mean for novices?
The analysis of the social performance management is an internal analysis of the MFI on various topics such as: interest rate, credit repayment duration, fees, types of products and its characteristics available to the MFI for responsible pricing, transparency in setting interest rates on credit and ancillary costs. It also relates to the level of satisfaction of the clients of the services offered by the MFI, the level of satisfaction of the staff of the MFI and the level of commitment of the staff in achieving the objectives of the MFI.
This information is a key aspect to not harm customers. Indeed, in finish, this analysis makes it possible to take measures not only interesting for the customers, but also adapted to the needs of smallholder farmers and realizable in the short deadlines.
Microfinance, Agri-finance and Value Chains (MAVC) project
MAVC is a four year project implemented and co-financed by ICCO and the Embassy of the Kingdom of the Netherlands. The MAVC project aims to increase the income and food security of 150,000 households through better access to rural microfinance and an integrated approach to development and value chain financing.
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