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Collaboration between farmers best model for Agribusiness in rural Africa –Equity’s Mwangi

farmingFarmers in Africa should partner and work together in order to get returns from their labour as as opposed to operating individually which alienates them from financial services.

This is according to Equity Bank’s James Mwangi who added that exclusion from financial services also meant that were excluded from other services such as health, education, utilities and source of livelihood.

Mwangi who was speaking at the launch of the MasterCard US$50 million challenge fund in Nairobi said that financial institutions also shy away from working with farmers directly as there was fear of production risk that puts into accounts issues like weather.

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“Credit risk is not the problem, but production risk tied to issues like weather. It might fail to rain and this may mean there is no production,” said Mwangi.

Mwangi suggested the mobilization of farmers to work in structured entities like the one done by the Kenya Tea Development Authority (KTDA), a move that would enable them meaningfully engage financial institutions like banks meaningfully.

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The CEO called upon the farmers to build value chains of their produce. He pointed out economies of scale against one farmer as opposed to structures groups saying that it was easier to give 560, 000 farmers 70 tonnes of fertilizer than give 12kg fertilizer to one farmer.

Echoing Mwangi’s sentiments of the need for farmers to build value chains, was Bidco oil company ‘s CEO Vimal Shah who added to that building structures among farmers will also go a long way into dealing with issues of production risks as they will be able to approach institutions like insurances to deal with production risks.

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Susan Mwenesi
Susan Mwenesi
Interested in business, technology and all things startups in Africa!

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