DEPUTY Minister for Agriculture, Hussein Bashe on Thursday met with Insurance stakeholders to discuss on how insurance companies can ensure smallholder farmers access to finance from commercial lenders.
Bashe pointed out on the need for a special mechanism to empowering smallholder farmers by addressing their challenge. One of the challenges is high interest rate charged on agriculture loans.
Not only that but also the grace period given to smallholder farmers before start ing to pay back the loan is one of the challenges, he explained.
For example the avocados farmers it takes about three years to mature, call for consideration by commercial lenders on the payment period.
The government in collaboration with insurance stakeholders should learn from the neighboring countries of Kenya and Zambia that are more advanced in using this system, where by 80 per cent to 90 per cent are not credit worth.
MGen Deputy Managing Director, Ernest Kilumbi, called on the need for private public partnership to empowering smallholder farmers.
The insurance companies’ objective of creating awareness to farmers on various insurance products focus at enhancing quality and quantity of the farm produce that can easily penetrate the markets.
To achieve this, insurance companies also encourage farmers to follow practice proper farming methods, use of best seeds and appropriate use of fertilisers.
Furthermore, the insurance have a role to train farmers ensure the crops produced match with the agriculture value chain.
UAP Insurance Tanzania Head of Business Development Mr Jabir Kigoda emphasized on the need for putting enabling environment when hazards appear to share the risks between insurance companies, banks and farmers.
The address risks challenges that farmers face, he said insurance companies and government form platform that can help create friendly environment for farmers to access finance.