CRDB Bank has dished out 150bn/-to cotton farmers in this season to buy farm implements. CRDB Chief Finance Officer (CFO), Fredrick Nshekanabo told the ‘Daily News’ on Tuesday that the loans were made possible thanks to a warehousing receipt system and the government directive to use bank accounts for payments.
“ We have loaned them via warehouse receipt system where after selling cotton the bank deduct its due, he said in an interview on the sidelines of a meeting to announce financial results for the first quarter of this year”.
“ The system works well since after selling farmer will be paid through their accounts,” Mr Nshekanabo told ‘Daily News’ at the sideline of press conference to announce the lender results for first half of this year.
He said also the farmers were loaned through their respective cooperative societies. The CFO said the government directive to pay farmers using bank account assures them of repayment since all transactions are done through receipt system.
“ The system enables the bank to reach many farmers hence increasing their productivity. For instance [in just ended] tobacco season, the bank lent 60bn/-to farmers in Tabora and repayment was 100 per cent,” Mr Nshekanabo said.
He said the introduction of crop insurance will add flavor to farmers output since package assures them on getting right price it covers the variation when price tumble.
The ministry of agriculture early this year said they are targeting to double cotton production to 440,000 tonnes in 2018/19 from 220,000 tonnes last season after distributing of quality cotton seeds.
The long term target was to attain 600,000 tonnes during next financial year and 1.2million tonnes by 2023.
The lender said fortnight ago that over 40 per cent of its total loan portfolio, equivalent to 650bn/- were provided to the agriculture sector in a year ending June.
CRDB’s Director of Retail Banking Mr Boma Raballa said at the ongoing Farmers’ Week in Bariadi, Simiyu that the bank highly valued agro-activities that support over 80 per cent of the country’s population.
CRDB said out of 650bn/- equals to 23 per cent or 150bn/- was lent to cash crops farming, agro-raw material for industries, farm implements and agro-processing.