AFRICAN governments can learn from
the Indian experience of starting farmer credit cards that have so far
enabled over 90 million small scale farmers to access to loans.
Speaking at a plenary session during the
ongoing India Africa Conclave organized by the Confederation of Indian
Industry, the National Bank for Agriculture and Rural Development
consultancy, Chief Executive Officer, Mr Kishan Jindal, said that
agriculture credit has been the ...
biggest mover to boost food security in
India.
“In agriculture and other sectors, it
makes sense for Africa to partner with India because there is much we
can learn from each other. In the access to credit, India has a diverse
network of banks that include commercial and cooperate banks where
currently 18 per cent of their loans go to agriculture,” he explained.
The Kisan Credit Card (KCC), scheme
introduced in August 1998 has emerged as an innovative credit delivery
mechanism to meet the production credit requirements of the farmers in a
timely and hassle-free manner.
The scheme is under implementation in
the entire country by the vast institutional credit framework involving
Commercial Banks, Regional Rural Banks and Cooperatives and has received
wide acceptability amongst bankers and farmers.
KCC holders are also covered under
Personal Accident Insurance Scheme (PAIS), against accidental
death/permanent disability. Bank assesses farmer’s eligibility on the
basis of land available for cultivation and the scale of finance fixed
by the District Level Technical Committee in that district and the
credit history of the farmer.
Mr Kishan said that the success of the
farmer credit card scheme is hinged on having a huge investment on
capacity building for bankers and farmers and an area that India is more
than ready to work African government in the modernization of their
agriculture sector for long term food security.
This commitment should be good news to
Tanzanian farmers taking into account that latest research findings show
proportion of adult population who use banks and other formal financial
institutions in the country is 12.4 percent only.
Recently the World Bank Board of
Executive Directors approved 70 million US dollars in new financing to
support Tanzania’s agriculture sector and strengthen it by linking
smallholder farmers to agribusinesses for boosting incomes and job-led
growth.
A WB statement issued in Dar es Salaam
notes that the newly-approved SAGCOT Investment Project is financed by
the International Development Association (IDA) and seeks to develop
income opportunities for 100,000 smallholder farming households by
providing them with new technologies and marketing practices and
expanding partnerships with lucrative agribusinesses in the Southern
Corridor of Tanzania.
Once implemented, the project will
directly benefit over half a million people and engage 40 agribusiness
operators, with emphasis on including women in successful commercial
value chains.
Last year the country launched an
agricultural development bank with the government pledging to raise 380
million US dollars over the next eight years. “The bank will address
challenges that have hampered agriculture such as lack of financial
packages.
Different financial packages will suit
different categories of farmers,” announced former President, Jakaya
Kikwete, during the launch ceremony of the bank.
The Tanzania Agricultural Development
Bank (TADB), will receive 48 million US dollars every year for eight
years from the government so that its 20-years strategic plan can be
implemented.
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