NMB SOLUTIONS TO EMPOWERING LOCAL FARMERS

NMB Bank Chief Executive Officer, Ruth zaipuna (right) speaks at the Africa Food Systems Summit 2023, as one of the presenters in the first session of the conference yesterday, which involved various stakeholders from the food sector within and outside Africa. On the left is the Head of Strategy Alliance and Transition Finance, Rabobank - Ben Valk and Vice-President of Farmer Solutions, OCP Africa - Mehdi Filali.

Smallholder farmers have a critical role to play in ensuring food security in the country which NMB Bank has said is ready to finance and continues to support in partnership with local and international partners.

Speaking yesterday in Dar es Salaam at the ongoing AGRF 2023 Summit, Chief Executive Officer Ruth Zaipuna outlined the bank’s backing of the farmers and the solutions it offers them, noting that financial institutions are obliged to empower them economically.

According to her, digitalization of financial services has greatly helped to surmount barriers hindering the small-scale farming fraternity from accessing formal funding sources and other banking solutions that are crucial in their operations.

“Financial institutions still have a significant role to play in driving economic empowerment of smallholder farmers, majority of whom are subsistence based, with low productivity, and living in extreme poverty,” she noted during the panel discussion on how the private sector can support smallholder farmers to increase food and nutrition security in Africa.

The side event at the Africa Food Systems Forum 2023, whose theme is “Recover, Regenerate, Act: Africa’s Solutions to Food Systems”, was organised by OCP Africa in conjunction with Fertilizer Canada and the World Business Council for Sustainable Development (WBCSD).

Commenting on the role of top lenders like NMB in empowering African peasants economically, Ms Zaipuna said they deserve and require financial support due to their economic relevance and importance in the growth and development of the agricultural sector.

Peasants not only make up 90 per cent of farmers in sub-Saharan Africa (SSA) and produce 80 per cent of the continent’s food but also constitute a major chunk of the population in the region.

The NMB leader said access to financial services has been a critical barrier for smallholder farmers in achieving their full economic potential, a challenge the bank has been addressing through innovative digital financial solutions and capacity building programmes as well as awareness campaigns such as Teleza Kidijitali.

“At NMB we firmly believe that for all smallholder farmers in our communities, financial inclusion is a pathway from poverty to prosperity,” Ms Zaipuna told the panel.

“This is because access to affordable financial products and services — like savings, credit and insurance — has proven to have the potential to make a telling difference between living hand-to-mouth on meagre returns and running a profitable agribusiness, earning a sustainable living income,” she explained.

Measures employed by the bank to support the farmers, she added, include investments to broaden the bank’s market outreach by extending its branch network as well as increasing agents and digital channels.

Currently the lender has 230 branches, over 20,000 agents and nearly 800 automated teller machines.

NMB Bank also continues to come up with innovative products and solutions that meet the smallholder farmers’ demands. Studies show that the majority of them struggle to access formal financing with most of them borrowing from informal sources, Ms Zaipuna pointed out.

“To address this challenge, we came up with a unique mobile loans proposition dubbed ‘Mshiko Fasta’ through which customers can borrow up to US$200 using their mobile phones,” she noted.

Under the bank’s financial inclusion agenda, Ms Zaipuna said NMB is currently opening over 1.2 million new customer accounts per year. The initiative, she noted, plays a decisive role in including smallholder farmers into the formal financial services sector.