Risk affects loaning to farmers – Mate

Maize field farm.

THE microfinance institutions (MFIs) are looking for ways to build capacity to finance the agriculture sector to increase farming, Association of Microfinance Institutions of Zambia (AMIZ) president Webby Mate has said.
Mr Mate said currently, the sector is considered as high risky and not many financial institutions are willing to lend to farmers.
He said in an interview recently that the sector has potential to grow with the necessary funding but the risk factor is hindering progress.
“Lending to a field like agriculture is a new phenomenal for MFIs in the country. As you know, agriculture is considered as risky and not many financial institutions or even large ones seriously lend to it. MFIs are interested to provide funding to the sector but it will take a bit of time for them to build on the necessary capacity and begin to make decisions to finance the industry,” he said.
He said MFIs want to invest in businesses where the losses are manageable as most farmers depend on seasonal rain-fed farming.
“We hope that in a small way MFIs can reach a point where they seriously start funding agriculture because a number of farmers in this country have a lot of potential in enhancing agriculture,” he said.
He also said MFIs are studying ways of lowering the cost associated with lending to farmers.

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