Joachim Mouyala Mbemba is a farmer in the Boko district of the Pool region in Congo-Brazzaville. He grows onions, tomatoes, and peppers. But until recently, his harvests were poor. He faced several years of low yields due to erratic rainfall. But today, those bad growing seasons are just a memory. Thanks to a microfinance loan, Mr. Mbemba purchased a water pump. Now he no longer worries about the rain.
In Congo-Brazzaville, lack of funds is one of the biggest obstacles to developing small farms. Small-scale farmers do not usually have sufficient collateral to access bank loans. Microfinance institutions are attempting to fill this gap by providing small loans.
For Mr. Mbemba, a microfinance loan gave him a chance to manage the ongoing problem of erratic rainfall. Water sources are several hundred metres away from his field, making it almost impossible to water crops by hand. So he decided to install a small irrigation system.
With the money he earned from selling crops, he was able to purchase used pipes. But he couldn’t afford a pump.
Then one day, he made a deposit at a branch of the Congolese Mutual Savings and Credit. There he learned about a loan program called “Credit for agriculture.” Mr. Mbemba explains: “I could get a loan that allowed me to buy a pump worth 250,000 CFA francs (about 480 US dollars). Every month I would pay back about 7,000 CFA francs (about 13 US dollars).” He would have four years to repay the loan.
After receiving the loan, he wasted no time in setting up his irrigation system. Mr. Mbemba says that the loan allowed him to do what his savings could not – carry out his plan for dealing with the vagaries of the rainy season. He adds: “Thanks to the loan, which helped me to cope with unpredictable rainfall, I re-discovered my interest in farming.”
Since Mr. Mbemba acquired his pump, his harvests are larger and of better quality and his earnings have increased.
Each week after he sells his produce, Mr. Mbemba goes to the bank to make a loan payment. He makes higher payments at harvest time so he can pay off the loan quickly. At other times in the farming cycle, farmers may request to defer payments.
Ngombe Dan is an agent at Congolese Mutual Savings and Credit. He explains that microcredit loans aim to address the needs of farmers by allowing for flexible repayment. He adds: “The ‘Credit for agriculture’ [loan] is one of the least restrictive in our institution. Farmers receive small loans without the risk of mortgaging their land or any property.” The only constraint is that the farmer must have at least as much money in his or her account as requested in the loan.
Both private banks and non-profit organizations have developed microfinance programs in recent years, offering small producers better access to financing. The availability of credit is changing lives, both economically and socially.
Mr. Mbemba is pleased to be completing payments on his first loan. He expressed his satisfaction with these words: “I still have four months to pay off this loan and after that I will take another to start selling improved seeds in Boko.”