Islamic Bank of Guinea launches innovative farmer financing

7/10/2018 8:51:03 AM

Pineapple planters in Guinea can now acquire fertilizer and irrigation material as part of a new way of financing by the Islamic Bank of Guinea. The bank has extended its Islamic finance product called ‘Mourabaha’. The solution addresses the working capital challenge that farmers face in Guinea.

Planters can get the funding for the much-needed fertilizer and irrigation material as part of a pooled procurement by the Federation of Fruit Planters of Lower Guinea, that is supported by the bank. The ‘Mourabaha’ financing offers terms and conditions that are particularly advantageous, specifically a reimbursement calendar that is fully aligned with harvest dates; farmers can benefit from a grace period that can be extended to 18 months.

The financing mechanism and the partnership between the bank and the planters federation is a result of the pineapple value chain initiative being implemented by the Prime Minister’s Delivery Unit (DU) and the Ministry of Agriculture of Guinea. It helps farmers deal with the working capital challenge. According to a report on Africa.com, this challenge was identified as one of the main barriers to increasing production and improving yields.

Further reading on Africa.com

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