The funding worth Rwf2 billion was secured through the partnership between Rwanda and Belgian Development Agency, Enabel.
Enabel works with the Government of Rwanda on different projects meant to promote poultry, pig farming and agro-processing.
Normally, commercial banks provide loans with interest rates between 16% and 17%. The interest rate on loan from Saving and Credit Cooperatives (SACCOs) can go up to 22% while the Development Bank of Rwanda (BRD) offers loans at 12%.
The Rwf2 billion funding will be channeled through the Development Bank of Rwanda (BRD) which will also work with commercial banks to lend it out to beneficiaries with poultry, pig farming projects as well as those producing animal feeds effective from January 2022.
Dr. Solange Uwituze, the Deputy Director General in charge of Animal Resources Research and Technology Transfer at Rwanda Agricultural and Animal Resources Development Board (RAB) has told IGIHE that beneficiaries will receive loans at 8% interest rate.
“If someone applies for Rwf50 million loan in a commercial bank, the latter will consider 8% interest rate to be paid by the farmer or animal feed producer while the Government will cater for the remaining 8%,” she said.
Dr. Uwituze explained that the interest rate subsidy will not go beyond Rwf100 million.
“The Government shall only pay the interest rate not exceeding Rwf100 million for a farmer or animal feed producers requesting loan under this financing scheme,” she revealed.
Beneficiaries will have to go through existing loan application processes. Those without collateral will continue seeking assistance from Business Development Fund (BDF).
The Government mulls increasing the Rwf2 billion allocated to the fund depending on available means.
Poultry and pig farming are among projects benefitting from the subsidized National Agriculture Insurance Scheme launched in 2019.
It is implemented by the Ministry of Agriculture and Animal Resources (MINAGRI) in collaboration with partners including Radiant Insurance, Access to Finance Rwanda, Prime Insurance and Sonarwa.
Under the subsidized agriculture insurance scheme, a farmer provides 60% of insurance fees while the Government caters for 40% of farmers payments.
The cost of insurance equals 4.5% of the total value of the cow.
So far, a total of 208,749 chickens and 3,020 pigs have been insured.