Bankers, farmers discuss ways to unlock agri-financing
Bankers Association of Malawi (BAM) in collaboration with Farmers Union of Malawi (FUM) and GIZ have partnered to unlock financing in the agriculture sector.
BAM president Phillip Madinga told a conference on agriculture financing in Lilongwe on Friday that there is need for collaborative efforts between the banks, farmers, development partners and government for a long-lasting impact. He acknowledged the low levels of financing in the sector.
He said: “Our efforts alone are not enough. The challenges we face, such as climate change, fluctuating market prices and the need for sustainable farming practices require a collaborative response and efforts.”
In a statement, GIZ said financial institutions have limited understanding of agricultural markets and lack expertise on agricultural financing.
“Actors in the agriculture sector have insufficient knowledge about financial management, analysis practices,” read the statement in part.
One of the participants, Acades chief executive officer (CEO) Hastings Nhlane said there is need to ensure that the agriculture sector is formalised, adding that could be the only way to bridge the financing gap.
However, he said the disconnection between the farmers and the banks is exacerbated by failure by most off-takers to offer contracts to farmers.
FUM CEO Jacob Nyirongo said the current terrain in agriculture is faced with numerous challenges, apart from low financing.
Treasury data shows that agriculture contributes about 25 percent to the country’s gross domestic product.
