Forum Discusses Rural Finance Access for Agricultural Development

Addis Ababa, February 3/2021(ENA) Ministry of Agriculture held consultations today with stakeholders on ways of enhancing loan access for agricultural development.

The forum held under the theme "Rural Finance Access for Agricultural Development" discussed the shortcomings in providing loan for the sector and proposed solutions.

Speaking at the forum, Agriculture Minister Omar Hussein said lack of access to credit and shortage of government budget are the main obstacles to agricultural development.

Noting that Ethiopia is endowed with abundant natural resources, he stressed the lack of financial access to the sector which has become a bottleneck for the productivity of the sector.

The financial policy of the country does not allow farmers and pastoralists to put their movable assets up as collateral for bank loan.

Besides, the financial initiations in the policy to provide 5 percent of the loan for the agriculture sector have not been implemented so far, the minister added.

National Bank of Ethiopia (NBE) Financial Inclusion Director, Fikre Markos Abebe  admitted that the agricultural sector is not provided adequate credit from financial institutions.

Loan provided for the sector is not more than 10 percent of the total loan in the country, he stated, stressing the need for establishing sustainable and secure financial system to solve the problems.

Development Bank of Ethiopia President, Yohannes Ayalew said on his part that few people come to take loan from the bank established to provide loans for the agriculture and industry sectors due to lack of awareness.

The forum finally proposed the establishment of a financial institution (bank) for specifically agriculture or revision of the financial policy to boost agricultural productivity.