Funding for the agricultural sector is alarming. Microfinance institutions and banks are reluctant to support small farmers (the backbone of our economy). Lacking financial support from the latter, they resort to GFCs. Nevertheless, their savings remain too low to launch a real development.
A few figures to understand. In Burundi, 90% of the population derives its livelihood from agriculture. That’s not all, the Burundian economy is highly dependent on this agriculture, which contributes more than 46% to GDP and 95% to currency. These proportions are substantial enough to be neglected.
However, these peasants hardly attract the financial systems whereas they are condemned to produce for the 12 million inhabitants and to make turn the national economy. Here, the majority of agricultural loans are granted to farmers by default: employees, traders and authorities, residing in urban areas. who very often practice agriculture alongside their profession. However, real farmers, meaning peasants here, have little capital to invest in their agricultural activity and rarely have access to credit. As a result, this results in low productivity and ultimately economic instability at the national level.
GFC, the spare wheel
However, despite all these constraints, farmers face significant financing needs. Given their very low self-financing and bank credit margin, hopes are pinned on community financial groups to ensure household accumulation and security, to buy agricultural inputs and pay agricultural labour. Also, to meet basic needs during the lean season.
In my opinion, while GFCs help farmers, policies that go in this direction have a positive impact on the development of the country. Instead of seeking to organize prosperity and economic growth through measures, laws, decrees and sanctions, the country will have more chances of obtaining it by liberalizing its economy. Moreover, among the causes of the inflation that is observed today, there is the drop in production. However, to boost this production, farmers need funding.
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