Government says the newly launched Agribusiness Investment for Market Stimulation (Aims) will enhance the capacity of banks to provide more loans to smallholder farmers.
According to Principal Secretary in the Ministry of Industry, Trade and Tourism, Cliff Chiunda, agriculture attracts less than five percent of lending from the financial institutions in the country because it is considered to be a high risk sector.
“It is very important to us in the sense that it is providing training to banks as well as various financial institutions of the country, so that they can better understand the Agriculture sector which is a key to the country. The training will enhance capacity building of these financial institutions hence more financial support towards the agriculture sector,” said Chiunda.
Chiunda also said the Aims project focus to expand lending to SMEs in agribusiness through the Loan Guarantee Facility (LGF) will go a long way in increasing access to credit and markets of the SMEs.
“The USA government through Overseas Private Investment Corporation (Opic) has set aside $50 million dollars which will be used as a loan guarantee scheme to those SMEs and cooperatives in the agriculture sector. These guarantee loans will be in the range $5000m to $1million per each SMEs or cooperative. This will make huge difference towards boosting the agricultural sector through access to finance,” he said.