#National News

MOA, MFIs endorse US$3M Islamic microfinance credit facility contract

Aug 9, 2021, 1:10 PM | Article By: Yunus S Saliu

In its quest to contribute to the improvement of the livelihood of rural and peri-urban communities in The Gambia, the Ministry of Agriculture Friday signed a $3 million (three million dollars) contractual agreement with two microfinance institutions – Supersonicz Financial Limited and Gambia Teacher’s Union Islamic Cooperative Credit Union (GTU-ICCU).

The endorsement of the agreement was held at the Small Ruminant Production Enhancement Project (SRPEP) office in VISACA Apex Building, Brusubi Institutional Layout.

The signed contract, among other objectives, is to strengthen the productivity and resilience of production systems and stimulating entrepreneurship in the Small Ruminant Production/Businesses. And will specifically focus on assisting farmers with monies through Murabaha, Ijarah or Salam mode of financing to increase small ruminant production, breeding, fattening, marketing and value addition among others.

The project will transfer a total of USD$ 3,000,000.00 through stage payment and the two microfinance institutions will be responsible for the implementation of the activity during a period of three years. The signed contractual agreement stipulates the terms and conditions of investment, and how profit and risk will be shared.

Speaking on behalf of the minister of Agriculture at the signing ceremony, Hassan Jallow, permanent secretary at Ministry of Agriculture expressed his ministry’s delight over the signed contract.

He stated that the signed contract with the two microfinance institutions will open the doors for access to the financially constrained farmers.

He noted that access to finance has come up as a key challenge for all agro-pastoralists and other actors operating in various livestock value chains.

“Thus, the reason why project set aside a financing line of up to $3million the ISFD Loan and in the form of revolving funds to local Islamic finance practicing institutions (FIs) to make money available to address the constraints of small ruminant value chain actors.”

At this juncture, the ministry’s permanent secretary thanked His Excellency President Adama Barrow for providing enabling environment to explore this unique financing model which has never been initiated in The Gambia, describing it first of its kind.

He quickly warned that the facility to be provided to the two microfinance institutions must be utilised as intended “the beneficiaries must have access to the funds with efficient and effective mechanism of delivery to the farmers and other operators in small ruminant value chain. Also, the two MFIs should also bear in mind that the amount given to you shall return in full as per the contract agreement.”

Mr. Jallow therefore advised all and sundry especially women and youths to take full advantage of the opportunity provided to them and make best use of the facility provided as it has been proven as best financing mechanism to facilitate easy access to finance, thus improvement of livelihood.

Mamud Njie, the project director said the signed contract between the Ministry of Agriculture, GTU-ICCU and Supersonicz Financial Limited marks a significant milestone in the implementation of SRPEP as “it completes the setting up of the project (phase I) and begin the implementation phase (phase II) of the project.”

He disclosed that the project is located in 39 districts of the country – rural and peri-urban and targets the development of small ruminant production considered for many reasons as an avenue with tremendous potential to contribute immensely to sustainable development goals (SDGs).

He also disclosed that the eligibility for financing would include purchase of animals, feeding operations, and animal health related operations, downstream meat processes and sales by operators who are members of registered organisations and or individual traders holding trade licenses. He warned that loans are to be recovered and collateral will be required.

The project director harped on the components of the project and made it clear that “the project has set aside a financing line of up to $3 million from the ISFD Loan and in the form of revolving funds to two local (sourced) Islamic Microfinance Practicing Institutions (MFIs).”

“Each MFI,” he emphasised, “is allocated USD1.5million to disburse and recover during a period of three years. At the end of the three years the $3million will be returned in whole to IsDB.”

Mamud Njie, thereafter thanked the Ministry of Agriculture for the support to the project.

Baboucar Joof, managing director of GTU-ICCU, spoke on behalf of the two contractors -Supersonicz Financial Limited and Gambia Teacher’s Union Islamic Cooperative Credit Union and thanked the MoA for the trust bestowed on them.

The signing ceremony was witnessed by different departments of the Ministry of Agriculture.

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