Islamic Bank of Guinea introduces financing product for agricultural inputs targeting pineapple farmers
The Federation of Fruit Planters of Lower Guinea has organized the distribution of fertilizer to planters who subscribed to a new financing product offered by the Islamic Bank of Guinea (BIG).
The BIG, in collaboration with the Office of the Prime Minister's Delivery Unit (DU), has extended its Islamic finance product called "Mourabaha" to pineapple planters so they can acquire fertilizer and irrigation material as part of a pooled procurement by the Federation.
The product offers terms and conditions that works for the farmers specifically a reimbursement calendar aligned with harvest dates, a grace period which can be extended to 18 months, and a preferential financial cost which is a margin of 7.5% over 18 months for the fertilizer and a margin of 15% over 36 months for the irrigation material.
This new partnership between the BIG and the Federation is a result of the pineapple value chain initiative being implemented by the DU and the Ministry of Agriculture.
It addresses the working capital challenge that small producers face when trying to access inputs like fertilizer and irrigation kits - a challenge that was identified as one of the main barriers to increasing production and improving yields.
This Islamic finance product conceived for an organization of farmers should make it easier for the Guinean pineapple producers. For this first pilot phase, a group of planters in Kindia and Maferenyah have signed up to the financing mechanism.
"We want this pilot phase to have a ripple effect, to encourage other planters to join the mechanism and be supported by the Federation to grow quality fruit" commented Moussa Camara, President of the Federation, as he was receiving the cheque from the BIG for the purchase of fertilizer.
The DU and the Ministry of Agriculture who developed this financing mechanism and who support the Federation with the implementation, are working on the sustainability and expansion of this mechanism.
Technical partners including the COLEACP , Winrock and CNFA have been mobilized to support the Federation in its activities of technical assistance to farmers and management of the credit cycle.
In total, the BIG has secured an envelope of close to 2 billion GNF to support the Federation. Aguibou Barry, the Head of the BIG branch in Kindia said: "We are very happy to have developed a good relationship with the Federation of Fruit Planters of Lower Guinea and we are planning to make this relationship mutually beneficial".
The DU aims to accelerate the implementation of Government flagship initiatives through the development and incubation of effective, sustainable, and results-oriented implementation and governance approaches.
The DU's pilot projects are focused on agriculture, mining and leadership development. In the agriculture sector, the DU's interventions, in collaboration with the Ministry of Agriculture and the Ministry of Commerce, focus on revitalizing the pineapple industry and on supporting Guinea in reclaiming its leadership position in international markets.
The priority interventions include support land extension, preparation and irrigation in order to nearly double land dedicated to pineapple production by 2020, from 350 to 650 hectares. Improve access to and use of fertilizers to increase yield by 70% by 2020, from 30 metric tonnes per hectare to 50, encourage the production of 2,500 metric tonnes of pineapples for export by 2020 and encourage the processing of pineapples at both artisanal and industrial scale.