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Thursday, June 20, 2024

Banking sector told to invest in agric to drive commercialisation, poverty eradication

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By Tabora Bojang

The banking sector was told that it must work to invest in Gambia’s agricultural initiatives to help socio-economic development.
According to the director of Agri business services under the Ministry of Agriculture, investment in the sector by Gambian banks will help alleviate poverty and unemployment.
“High interest rates, coupled with the risk factors mostly considered by the banks, are among principal barriers affecting farmers in accessing capital to venture into commercial agriculture,” Mr Abba Sankareh observed.
Speaking at a day-long seminar designed to promote financial sector participation in agriculture, organised by the FAO and partners, Sankareh said agricultural financing remains “a big issue” in the country as “farmers cannot get access to finance and this has been a perennial problem.”

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To change such trends, he suggested that banks “open up and consider investing capital in small-scale farmers to better their lives”.
He said: “We want to see our farmers’ lives improved, we want to see them move out of poverty, which they have been living in in the past 50 years simply because their agriculture is subsistence. They only grow crops to feed themselves and their families with no income to better their lives.

“The need for banks to come in is very crucial on how we can make finance easily accessible to farmers most of whom are small-scale operators.”
He said cash saving with financial institutions is limited in rural settings, adding that the issue of providing collaterals has also hindered access to finance for farmers.
Sankareh, who is also the registrar of Cooperative Societies, emphasised the need for financial institutions to “break away from risk perceptions” and take leading role “for effective private sector investment and financing in agriculture and agribusiness.”

He disclosed that the Government is considering the re-establishment of an agricultural development bank where investments will be geared towards agriculture in order to move from subsistence to fully commercialised agriculture.
“We had matching grant components with some agric projects directed towards promoting investment in agriculture, however, with the small scale farmers – these are poor people – if you ask them to pay even 10% equity they could not afford it and that is why some of this matching grants with those projects failed.”

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The agri business services in collaboration with the FAO is promising the use of a value chain based approach, which is a new innovative market-oriented and investment-led for the execution of a 1.2 billion dalasi project entitled ‘Agriculture for Economic Growth and Food Security/Nutrition to mitigate flows.’

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