Africa Can Learn From India in Quest to Support Farmers

Indian Patriot

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.