Thousands of smallholder farmers in Rwanda can now apply for micro loans online at low interest rates thanks to a new partnership between Equity Bank, SPARK and MoneyPhone.
Agriculture is the leading source of income for rural families in Rwanda. Yet, less than 2% of bank lending in the country goes to the agricultural sector, leaving vital financial assistance out of the reach of most farmers.
Equity Bank Rwanda has plans to change that. It has joined forces with MoneyPhone and Dutch NGO SPARK to break down barriers to financial inclusion in Rwanda by bringing affordable credit to those who need it the most. The bank has launched a new digital lending platform – built on MoneyPhone’s Digital Loan Origination Solution – that allows smallholder farmers to apply for micro loans via a mobile app or an online portal.
Belise Mugwaneza, Agribusiness Manager at Equity Bank Rwanda explains: “We chose MoneyPhone because they had a well-established solution and a strong relationship with our partner SPARK. That gave us confidence and trust in their product.”
New approach to agricultural lending
Equity Bank assesses the loans based on historical production data from farmers, including records of harvests and sales at cooperatives. Farmers can use the credit to purchase seeds, fertilizers and other inputs, pay laborers and harvest, market, and transport their crops.
Digitized onboarding simplifies the application process for farmers, who no longer need to travel long distances to visit bank offices in person. It also makes for faster turnaround times, improving the bank’s operational efficiency and getting money to borrowers faster.
Reaping the benefits
Equity Bank ultimately plans to digitize its entire lending process, extending the benefits it has already realized in onboarding right through to loan processing, underwriting, disbursement, and repayment. This will help Equity Bank to lift productivity even higher: Teams will be able to process and manage loans with greater speed and accuracy, enabling the bank to cost-effectively scale up operations to bring competitive loans to even more customers.
Most importantly, Equity Bank’s new digital capabilities have opened a valuable opportunity for the bank to move into a previously untapped and underserved market, where it can make a real difference to people’s lives and livelihoods. By bringing affordable financing within reach of Rwanda’s smallholder farmers, Equity Bank is empowering people with the means to grow their businesses, improve their living standards and create more jobs in their communities.
Belise Mugwaneza concludes: “We are excited to be on this journey of financial inclusion with Moneyphone and make an impact in the lives of smallholder farmers in Rwanda.”
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