A new farmers’ credit line programme, offered by Demerara Bank Limited, promises to slash many of the woes rice farmers face in accessing much-needed finance to expand production or withstand disastrous events within the agricultural sector.
The new loan programme was launched on Monday at Demerara Bank’s Mahaica branch after consultations with the local farming community. Through those engagements, many of the challenges farmers face in accessing much-needed financing were unearthed.
Those challenges, Demerara Bank’s Chief Executive Officer (CEO) Pravinchandra Dave highlighted, include the difficulties in accessing credit, the high rate of interest and their unavailable collateral.
Cognisant of these woes, the CEO highlighted that Demerara Bank will not seek collaterals that are usually a prerequisite for loans. The News Room also understands that farmers can get between $1 million to $1.5 million, at an interest rate of just 7.5 per cent.
The processing and commitment fees have also been waived, Dave underscored.
President Dr. Irfaan Ali, who launched the programme on Monday, hailed it as a key initiative that will help protect Guyana, and the wider Caribbean region, against experiencing food shortages.
The Head of State told the gathering that supply chain challenges emanating from the COVID-19 pandemic, exacerbated by the Ukraine/ Russia crisis, illustrates just how vulnerable Caribbean countries are.
With this, he warned that the threat of food shortages and high food prices linger. To prevent any of those adverse events, President Ali emphasised that countries within the region need to produce more food.
Guyana is currently leading efforts within the Caribbean Community (CARICOM) to advance food security efforts; increased food production is a central focus of those efforts.
And this increased production, President Ali posited, must be supported by all- including financial institutions like Demerara Bank.
“Any private sector institution that is looking in a forward way at improving things for a country, must be responsive to national development priorities, must exercise responsibility to the people they serve, they must re-engineer the way they do things and they must re-energise themselves to meet the changing environment.”
He added, “I am very happy to say that Demerara Bank has demonstrated this in every single way.”
Already, Demerara Bank has received 193 applications for this programme and will be providing credit valued at $200 million. The first 20 applicants received their disbursement letters on Monday.
Seeranie Baichu, a farmer of over 25 years, was one of those who benefitted from the new programme. She detailed that her last three harvests were impacted by floods but with the new low-cost credit she received from the Bank, she will be able to restart cultivation on the 65 acres of land she manages.
Meanwhile, like President Ali, Agriculture Minister Zulfikar Mustapha said that rice farmers stand to benefit significantly in the new programme.
“As you know collateral is a major requirement for loans in Guyana and usually takes the form of real estates or other kinds of assets.
“However, we are here to witness a new dimension to loans… where a financial institution is here to provide loans to farmers without collateral,” Agriculture Minister Zulfikar Mustapha said at the event.
With Guyana pursuing an aggressive food security plan at home and across the Caribbean, Mustapha said that this programme will help farmers boost their production.
And he posited, “I believe that this farmers’ credit line programme bridges the cash flow gap that many of our farmers experience.”
Demerara Bank’s Corporate Secretary Chandra Gajraj also underscored that the Bank believes it is poised to support the needs of rice farmers, structuring the credit programme around their harvesting cycles.