Agricultural financing. The urgency of better support for microfinance

Written by admin

From the analysis made during a forum organized in Douala on the sector, Cameroonian microfinance establishments need to be better equipped to better finance agriculture, especially in the dynamics of the import substitution policy.

– Advertising –

In the Cameroonian financial landscape, microfinance is the institution closest to the rural world. It is more present in the hinterland, in areas where banks are absent. But despite this physical proximity, it is still limited in its contribution to the development of the agricultural sector.

Several analyzes were made during discussions on agricultural financing within the framework of the forum on the Initiative for Transparency in the Microfinance sector in Central Africa (ITIMAC). The meeting held last December in Douala provided an opportunity to take a look at the contribution of MFIs to the development of the agricultural sector, while highlighting its shortcomings. Most note a mismatch between financial services and the specific needs of agricultural and rural finance. There is therefore a gap between the needs of producers and processors and the financial offers. Another finding is that many MFIs hesitate to take all the risks associated with the rural sector. As a result, less than 5% of financing is directed towards agriculture. Investments in the production, processing and marketing of agricultural products are harmed. However, the rural world contributes to preserving the means of subsistence

Overall, the participants in this forum recognized that much remains to be done. And this, even if progress has been made in recent years, in particular through the agricultural financing promotion project (Profina) initiated by the German Federal Ministry for Economic Cooperation and Development and implemented with the Cameroonian authorities. It was therefore recommended to strengthen strategies to better equip MFIs to contribute more to agricultural financing and thus participate in the implementation of Cameroon’s import substitution policy. This would increase the figures already achieved by the Profina project, which runs from January 2018 to July 2024, at a cost of 3.9 billion FCFA. Implemented in five regions of the country, the project has already enabled MFIs to facilitate access to financing for 6,884 farmers and 568 managers of agro-industrial companies. We also note the development of more than 20 financial products for the cocoa, poultry, potato, soybean, corn and pork value chains with the project’s partner microfinance institutions. And more than 300 loan officers trained in agricultural financing.

Ben AYUK BESONG, head of EMF-Minfi promotion unit

“We are going to mobilize tools to refinance EMFs”

“It’s true that agricultural financing today represents risks that are specific, but I believe that the network that exists today makes it possible to proceed with a mystification of these risks… what is important is that these EMFs can equip themselves with internal tools, either in relation to capacity building or covariance risk management, etc. taking into account anything that could be detrimental to the quality of the portfolio and in relation to the government. I believe that the Minfi has instructed that we are mobilizing tools that will strengthen refinancing and support the development of MFIs. And I believe that in relation to the national development strategy for 2030, the structuring and configuration of these mechanisms will obviously marry the issues and challenges encountered by the microfinance sector in the financing of the agricultural sector. . Microfinance remains the pupil of the government in the financing of the agricultural sector because of its deployment, because of its location in the most remote areas. »

– Advertising –

Source link

About the author


Leave a Comment