SELF Fund AGRA and MUCOBA bank partnership releases 2.5bn agro credits

11Feb 2019
By Guardian Reporter
The Guardian
SELF Fund AGRA and MUCOBA bank partnership releases 2.5bn agro credits

THE SELF Microfinance Fund, MUCOBA Bank PLC and AGRA partnership has seen small and medium scale paddy peasants in 18 villages in Iringa Rural District receive digitally disbursed agro loans totalling about 2.5bn/- in three years effective 2018.

The loans disbursed in three instalments to cover farm preparations, during insecticides application and harvest periods related cost are a result of a smart trio partnership of SELF Fund, a Treasury owned and supervised entity, the Mufindi based MUCOBA Bank PLC, a transformed commercial bank out of the former Mufindi Community Bank and AGRA, a Nairobi based global Ngo engaging in bringing about green revolution in Africa and supporting farmers’ to increase productivity.

Christopher Ilomo, AGRA partnership coordinator at SELF Fund told members of the press accompanying SELF officials visiting some of the Fund supported agriculture and agro-products marketing schemes in Pawaga, Iringa Rural and Mafinga districts that SELF Fund and AGRA teamed up to raise funds for the agro-loans drive with the later developing appropriate financial tools to suit peasants.

“We got involved in the partnership strategically whereby SELF Fund and AGRA teamed up to create a special financial intervention for peasants while the while the Mufindi based and public listed MUCOBA Bank was entrusted with the role of disbursing loans to the targeted peasants in Pawaga Ward which is made up of 18 villages,” noted Ilomo.

He added that in an effort to save time spent by peasants in paper work processing agro-loans, AGRA and SELF developed digital agro-loans product whereby each and every loan processing stage is handled through the applicant’s cell phone including the loan approval notification.

Earlier the SELF Fund Director of Business Development, Gift Kudema told The Guardian that SELF Fund is dedicated to see peasants who are regarded as credit non worthy become credit worthy able to receive significant amounts of money in agro-loans like any other loan applicant in a Commercial Bank or a financial institution.

Kudema said one crucial role of SELF Fund is to create a financial access corridor for the poor in both urban and rural centres by creating an enabling environment for the poor to be offered small and medium loans by financial institutions of the likes of Saccos and Community Banks after SELF Fund issuing significant amount of loans to such institutions which later loan to the poor.

“Aware the majority of Tanzanians living in both urban and rural centres’ experience financial credit access exclusion the government moved in to try to reduce the poor exclusion in financial access by launching the SELF Fund in the year 2000 through the Abidjan based African Development Fund (ADF) and affiliate of the African Development Bank (AfDB) which offered a eight US dollars credit line,” Kudema opened-up, adding that the Fund is able to prove lower income peasants may become billionaires in a reasonable period of time provided commercial banks and financial institutions come up with appropriate and pro-poor agro-loans products of the likes of the MUCOBA digital loan financial product etc.

The SELF Fund Director for Business Development, was of the view that her fund on behalf of the government has lived-up the state expectations to the Fund of making sure both the rural and urban based folks access financial credits the way middle class and the rich get in and out of bank halls laughing after successful securing loans with a minimal set of credit conditions and a few minutes paper work.

A successful paddy farmer turned entrepreneur , Twalibu Ubwa whose business skills saw him mobilize about 22 fellow Itunundu villagers to register with BRELA a Tuungane Company Limited to buy, own and run a paddy processing machine worth over 80m/- (US$ 36,363).

Ubwa said after they realized Itunundu villagers harvest sufficient tones of paddy which then is sold unprocessed at a throw away price they registered the firm and approached two commercial banks with a branch network across the country for a loan. The Entrepreneur revealed the response they got from the two banks in a separate time could make one faint.

“We were told point-blank we do not qualify for a loan and we were warned fore-hand there is no commercial bank may offer Tuungane Company Limited a loan as we were far away from the banks set conditions for one to qualify for a credit. However luck enough we got wind of a SELF Fund supported and MUCOBA Bank PLC administered Digital agro-loan tip.

On visiting MUCOBA Bank Itunundu field office, to our surprise the Bank boss offered us good news by okaying the loan request and handed us the paddy processing machine with a price tag of 80m/- which we own and run to date as you can witness before your eyes here running smoothly,” hinted the Tuungane Company Limited Manager as he took The Guardian around the building where the paddy processing plant is installed.

Ubwa gave a testimony the way the paddy processing plant has changed their life standards for better saying they have been receiving a minimum of 50 paddy loaded sacks a day to process with peasants paying a good sum of cash for the services.

On their part peasants in Igodikafu village which lies few kilometers from Itunundu village where the 80m/- worthy plant is installed have become rice sellers against paddy sellers a move which has seen them better their living by earning a better income after they stopped selling the low priced unprocessed paddy.

Job Malekela, Acting MUCOBA Bank PLC, General Manager thanked SELF Fund and AGRA for choosing to partner with his bank and for designing a digital agro-loan product saying the agro-loan product has changed the way MUCOBA serves its rural clientele, adding that to MUCOBA Bank PLC advantage the MUCOBA, AGRA and SELF Fund trio partnership has seen the bank liquidity rising hence able to release seven to eight figures loans.

“We received AGRA and SELF Fund partnership with optimism hoping to increase credit funding to peasants so that the disadvantaged rural folks may change their lives for better on receiving bank credits.

The slightly over 2.5bn/- released to Itunundu paddy farmers is a light at the end of a tunnel and a proof that AGRA, SELF Fund and MUCOBA Bank PLC smart partnership has taken the later several steps ahead in its effort to expand its services to as far as Songwe, Mbeya and Ruvuma regions,” summed up the MUCOBA Acting General Manager.

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