News Release: Strengthening Access to Financing for Commercial Farmers and Argo-Processors

NEWS RELEASE 

Strengthening Access to Financing for Commercial Farmers and Argo-Processors

Acting Permanent Secretary for Agriculture, Dr Vinesh Kumar and FDB CEO, Mr Saud Minam

Commercial farmers and Argo-processors that previously lacked access to financing due to the absence of equity contribution will now be able to expand their business by investing through an equity grant and loan package.

The Fiji Development Bank (FDB) and the Ministry of Agriculture today (08.10.21) signed a Memorandum of Understanding to promote the expansion of commercial agriculture by strengthening financial assistance to farmers and agro-processors.

FDB Chief Executive Officer, Mr. Saud Minam, said that the Bank is delighted to partner with the Ministry of Agriculture in support of the Commercial Farmers Equity Package.

“FDB is partnering with the Ministry under this programme which is an initiative of the Government to provide financial stimulus in the form of equity to 30 commercial farmers and agro-processors in improving farm mechanization, agricultural infrastructure, and agro-processing infrastructure support and equipment,” said Minam.

With the Ministry providing an incentive grant in the form of equity that would meet 20% of the total investment cost, FDB will provide the other 80% financial solution, he said.

“FDB recognizes the financial barriers in the agriculture sector and we work towards creating an enabling environment for farmers and agri-businesses to overcome such challenges,” said Minam.

“This incentive will help remove the barriers that prevent the full participation of farmers, producers and processors in accessing loans through digital channels from FDB,” said Minam.

“We are proud to collaborate with the Ministry in delivering solutions for businesses that are looking to tap into growth opportunities,” he said.

Equity Fund to Boost Agri-Business 

“This Package will help strengthen the food system, exports, create new market opportunities for farmers and processors, and help make supply chains more resilient to economic and natural shocks such as those caused by the pandemic and climate change,” he said.

This is a whole response to address supply chain challenges to economic recovery during the pandemic, he said.

This programme will support targeted farmers increase exports, household livelihood, income quality, and increase employment for Fijians in the long term,” he added.

“The equity incentive will help boost agri-businesses and support the growth of the sector along the value chain from farmers, producers to processors by providing them access to credit,” said Minam.

He said that such financial instruments whereby loans come with a grant component for equity, devoted monitoring, and pre-selected projects come at a low risk to the Bank and increased accessibility to finance for farmers- being a win-win situation for both.

Minam thanked the Government and the Ministry for allowing FDB to partner in this initiative with agriculture being the Bank’s mandated focus sector.

Farmers whose farm sizes are five acres and above and are registered entities as well as those who are producers and processors of crop and livestock commodities can access loans from FDB up to $250,000 with the Ministry providing an equity contribution of 20%,” said Minam.

There are nine categories of borrowing entitlement whereby a grant of 20% of the total project cost will be paid by the Ministry and a loan from FDB of a maximum of 80% of the total project cost paid by the customer.

The Ministry will provide FDB with a list of approved applicants whereby the Bank will then assess the applications using its own credit assessment criteria.

-Ends-