By Saio Marrah
10 Million US Dollars from the European Union Development Fund and another additional 10 million dollars from the Bank of Sierra Leone have been allocated to local farmers on credit in Sierra Leone.
The money from the European Union is under a project known as “Salone Access to Finance Project,” a five-year initiative Launched in Freetown on Thursday 21st March 2024.
The project is being implemented by the UNCDF Impact Capital for Development with four components which include investment. This focuses on the capacity of local financial institutions to be enhanced by providing concessional financing and investment support and the design of a matching grant facility.
The second component focuses on insurance, which deals with risk for agricultural investment diversified, with a particular focus on the economic empowerment of women and youths.
The other component focuses on increasing access and usage of digital financial and non-financial services by low-income people in particular farmers and women living in rural areas. The last component deals with improving the policy regulatory and institutional framework for financial services.
The other 10 million dollars provided by the Bank of Sierra Leone is aimed at giving credit to farmers with an interest rate of 10%.
At the launch of the project, the EU Ambassador to Sierra Leone, Manuel Muller said Salone Access to Finance is part of the EU jobs and growth programme in Sierra Leone, one of the EU’s flagship initiatives to support the people in the country for development.
According to him, agriculture is a key sector for Sierra Leone’s economy, which contributes to more than 50% of the country’s Gross Domestic Product (GDP) and more than two-thirds of the country’s active population work in agriculture, yet challenges persist to transform it into a more vibrant sector capable of driving the sustainable socioeconomic development of the country.
Muller noted that as of now, Sierra Leone has the lowest banking lending that goes into agriculture investment with only 1%, which he described as the lowest rate in Sub-Saharan Africa.
He referenced the “Feed Salone programme” as the government’s priority, which he said aims to ensure food self-sufficiency reduce food imports strengthen the resilience of the economy, and so on.
“Today’s event is a demonstration that the EU is committed to pursuing its efforts to support Sierra Leone in the endeavor,” he said.
Muller noted that the project will specifically support an improved investment climate and business environment to leverage private-sector investment in the agriculture sector.
He also told the participants that the intervention would act as a de-risking instrument to leverage responsible private-sector investment in agriculture.
The Bank governor, Dr. Ibrahim Stevens highlighted the various strides and regulations which the government has undertaken to ensure access to finance by farmers is realized.
He also used the opportunity to announce that the central bank has allocated 10 million dollars as credit dedicated to private farmers.
Minister of Agriculture and Food Security, Henry Musa Kpaka noted that the “Salone Access to Finance Project” provides credit facilities to farmers and business people and that those farmers can get up to 100 thousand dollars as credit facilities.
He called on farmers to go to the commercial banks, especially for the central bank’s programme in which he said commercial banks would participate tomorrow and that the guidelines would be uploaded on the website on how to go about it.
The Country Lead and Programme Manager of United Nations Capital Development, Mohammad Al-BataynehPh.D., said his main target for the project is to enhance the agricultural business economy in the country.
He pointed out that it will be done through the job programme which will target more than 500 thousand customers, especially women and youth farmers in rural areas.
On the issue of eligibility, Al-Batayneh said they would work out a mechanism that customers would have to fulfill to benefit from the project.
He described the insurance aspect as integral and that it was first time introduced not only in Sierra Leone but the whole of the West African sub-region.
In 2023, UNCDF signed the ‘Salone Access to Finance’ Project, a five-year initiative under the European Development Fund (EDF) and Jobs and Growth Programme, aligned with the EU priorities and strategies, both at the country and global levels.
The overall objective of the ‘Salone Access to Finance’ Project is to contribute to sustainable and inclusive economic development and job creation in Sierra Leone, particularly in the agriculture sector.
The Project is in line with the strategic objective of the Government of Sierra Leone to prioritize private sector-led growth as a key means of job creation, poverty reduction, and economic diversification.
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