Farming is Rwanda’s most important economic activity, with 72 percent of the population engaged in agriculture, particularly in rural areas. For subsistence and smallholder farmers, access to business loans and growth opportunities are severely limited. They are often excluded from traditional financial services and are therefore more susceptible to economic shocks and dependent on informal financing for their businesses. Due to structural inequalities, unequal access to resources and traditional gender norms, these burdens frequently fall more heavily on women. 

SPARK, in collaboration with Equity Bank, MoneyPhone , Access to Finance Rwanda and the Rwandan Irish Potato farming  cooperatives, has launched the Digital Access to Finance (DA2F) programme, which provides farmers with digital loans, lower interest rates and adjusted collateral requirements. Over 300 smallholder farmers have cut travel costs and decreased transactional delays while safely controlling their own finances.

When asked about her experience before enrolling in DA2F, Hilarie Kanyange says: “The loans were very costly, with a 24 percent interest rate”. Hilarie, a 30-year-old farmer from Northern Rwanda, has been cultivating Irish potatoes, maize and beans since 2017. 

Being able to apply for a loan through her phone allowed her to save time and money on travel to the city, and the interest rate on her new loan fell to just 14 percent. With these savings, she says: “I bought the seeds of good quality, pesticide and I was able to pay the labour of 5 people”.

Beatrice Musabyimana is a 42 year old mother of four. Her Irish potato farm covers one HA of land but caught in a cycle of subsistence farming, Beatrice was unable to pay for health insurance and school fees for her children. “I could hardly get agriculture inputs (organic manure, quality seeds, fertiliser) and enough labour to support me”.

“I boosted my production up to 40 percent”

Since receiving the digital loan, she says: “I bought two cows and this enabled me to get enough organic manure, and thus boosted my production up to 40 percent. I’ve got enough Irish potatoes to supply to the market and enough for home consumption.” She now employs seven labourers per season, can meet her household expenses, and has been able to easily meet her loan repayments.

SPARK’s partner in the DA2F programme, MoneyPhone, supplies the digital technology. CEO, Jan Vos, says: “[By working with SPARK], it helps us focus on the impact element of the business”. Collaboration between INGOs and private sector partners helps ensure that programmes like DA2F remain viable and sustainable, long after initial programme funding ends. 

“When I visited the farmers”, says Jan, “I could actually see and feel that they were happy with the product. When you are doing something worthwhile for another human being, it makes you happy as well.

According to a United Nations Capital Development Fund (UNCDF) report on the fintech landscape in Rwanda: “Retail payments are increasingly digital. The use of retail digital payments grew from 3 percent of the gross domestic product in 2011 to nearly 27 percent in 2017. The country is aiming to reach 80 percent by 2024.” As the use of digital technology increases, it’s important to make sure that women have equal access to these services, to serve them and their businesses. SPARK is proud to be part of the closing gender gap.