Agri - Loans - Farmers Need a Sustainable Solution

Posted on June, 8, 2016 at 08:23 am


Editorial

Cassava farmers in Ruhango District in Southern Province have appealed to Parliament and the Prime Minister's office to intervene in their failed negotiations with Rwanda Development Bank (BRD) over a loan gone bad, worth Rwf400million.

The bone of contention is a Rwf400 million loan, which the farmers have failed to pay back following losses due to Cassava Brown Streak Disease that struck the crop in 2013/2014 farming season, leaving farmers counting losses.

Both the farmers and the bank have genuine concerns for the stand that each party has taken. The farmers want a waiver instead of postponing the repayment period because they don't have a source of income to repay the loan, while, on the other hand, the bank is also right to insist on extension of the repayment period because it is important that it recovers that money and be able to lend to other people.

Running to the Prime Minister's office or Parliament is just a temporary solution, what the farmers need is to seat with the bank and seek a fair solution.

The farmers will still need other loans in the future because their livelihood depends on agriculture; coming up with a win-win situation for the two parties in the dispute is the way to go.

The cassava farmers will be setting a bad precedent, if they insist on a waiver instead of seeking for a convenient way to repay back the loans. Other financial institutions will be hesitant to lend to farmers because of such scenarios.

To avoid such risks in the future, it should be mandatory that any farmer who borrows must insure their crops.

The farmers' request for agriculture insurance against disasters threatening the sector, waiving of loan interest, among others, should be the focus of the stakeholders handling the matter.

Source: The New Times