The Democratic Republic of Congo (DRC), with vast arable land and abundant water resources, holds the potential to become Africa’s food basket.

Despite the rich natural assets, the country’s agricultural sector remains largely undercapitalized, offering an opportunity that financial institutions that are growing their reach in this new market such as Equity BCDC can capitalize on to catalyze the growth of this vital sector.

The DRC encompasses over 80 million hectares of arable land, yet only about 10 percent is currently under cultivation. According to the Food and Agriculture Organization (FAO), the DRC can feed over two billion people—more than a quarter of the world’s population.

Moreover, the country’s diverse climate allows for a wide range of agricultural products, including coffee, cocoa, rubber, palm oil, fruits, and vegetables, as well as staple crops such as maize, rice, and cassava.

Despite its potential, agricultural productivity in the DRC is among the lowest in the world. The World Bank reports that the yield gaps are significant, with actual yields often less than 30 percent of the achievable yields.

Factors contributing to this include reliance on outdated farming techniques, limited access to quality seeds and fertilizers, and insufficient agricultural extension services.

How financial institutions can bridge the gap

During the Equity Group-led business session held in Kinshasa in March, the Minister of Industry in DRC, Julien Paluku, revealed that agriculture, energy, mining, and infrastructure sectors are ripe choices for huge financing and investment.

“DRC is not defined by conflict; rather, it’s a land brimming with potential and opportunity. I invite you to join us in discovering and capitalizing on the wealth of opportunities that await in the DRC,” explained Julien Paluku.

While amplifying the investment potential, the Country Director of the World Bank in DRC, Dr. Albert Zeufack, added, “The key to unlocking the full potential of this growing economy lies in diversification. Whether it’s through the development of its rich mining resources, the harnessing of its fertile agricultural lands, or the creation of high-value value chains, diversification will undoubtedly chart the path forward for DRC’s economic prosperity

Banks such as Equity Group are uniquely positioned to transform the agricultural industry of the DRC through strategic investments and financial products tailored to the needs of the country’s agricultural sector.

This is because one of the primary challenges facing Congolese farmers is the lack of access to capital for purchasing essential farm inputs like high-quality seeds, fertilizers, and pesticides. Banks can offer specialized loan products with favourable terms to enable farmers to invest in these inputs, which are critical for improving yields and overall productivity.

For instance, the Equity BCDC AGROCOM loan allows investors in the agricultural value chain to finance the sale, processing, storage, import, and export of agricultural products and related materials. Other credit services targeting investors in the DRC’s agriculture value chain are: AGRODISPO, a loan that allows you to better manage your cash flow needs and AGROMAT which seeks to help farmers purchase equipment or the construction of buildings dedicated to agricultural enterprises.

Smallholder farmers, who make up the majority of the agricultural workforce in the DRC, often find it difficult to secure loans from traditional banks due to the perceived high risk and their lack of collateral. Microfinance institutions and agricultural co-operatives, supported by larger banks, can extend micro-loans to these farmers, using innovative lending models such as group lending or loans backed by future harvests.

Technological advancements in agriculture offer huge opportunities for increasing productivity and managing risks. Financial institutions can invest in agri-tech startups that provide solutions such as precision farming, mobile technology for market access, and blockchain for traceability but also attract younger generations to agriculture.

Currently, agricultural operations in the DRC are susceptible to various risks, including weather-related events, pests, and diseases. Banks and insurance companies can develop insurance products that protect farmers against these risks, thereby securing farmers’ income and encouraging them to invest more in their crops.

Read also: Mineral-rich DRC enters EAC bloc

Formal banking services

What’s more, by rolling out a warehouse receipt system, financial institutions can offer farmers better storage facilities and help reduce post-harvest losses. Banks can play a crucial role by providing loans against warehouse receipts, thus giving farmers immediate access to cash without selling their produce immediately at often low post-harvest prices.

Expanding access to financial services in rural areas is crucial with the World Bank noting that only about 4 percent of the population in DRC have access to formal banking services.

“Both Kenya and the DRC exhibit vibrant economies and diverse sectors, offering compelling investment prospects in the East and Central Africa region... With Equity Group’s extensive network and deep understanding of the local business landscape, we are fully committed to providing you with valuable insights and guidance throughout this journey,” Equity Group Managing Director and CEO Dr James Mwangi explained during the lender’s roadshow in the DRC in March. 

Additionally, by extending banking infrastructure and services into rural areas will empower farmers and rural communities, facilitating savings, secure transactions, and financial growth.

Beyond providing financial products, banks should also engage in capacity-building initiatives. Training programs in financial literacy, farm management, and best agricultural practices can help farmers optimize their resources and investments.

Finally, to unlock the full potential of DRC’s agricultural sector, collaboration between the government, private sector, and financial institutions is essential. Public-private partnerships can lead to improvements in agricultural policies, regulatory frameworks, and infrastructure development, all of which are necessary for a thriving agricultural sector in the DRC.

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