Building Financially Inclusive Systems: Transforming the Livestock Market


Farmers buying animal health products from an agro-dealer shop

Accessible finance is vital for small businesses and entrepreneurs. Yet, oftentimes, they struggle to access financing from traditional sources because they lack the knowledge to produce comprehensive financial documentation required by banks. Meanwhile, financial institutions may perceive small businesses as higher risk clients due to their size, limited track record, and insufficient collateral. In many countries, like Rwanda, financial institutions have limited knowledge in the livestock value chain financing opportunities compared to crops value chain. This makes it challenging for livestock businesses to secure loans or credit at favorable terms to take advantage of new business opportunities, such as expanding into new markets or launching new products. 

Given these challenges, it is critical to build financial initiatives and abilities that can assist small businesses to overcome funding challenges. By diversifying funding opportunities, development implementers can unlock the potential of innovative business ideas, stimulating economic growth.

It All Starts With Education!

From the outset of Orora Wihaze, a five-year Feed the Future-funded activity in Rwanda, the team identified fundamental systemic constraints that curtail livestock producers’ and small enterprises’ ability to access finance. These barriers included ineffective underwriting of risks related to animal-sourced food (ASF) production, aggregation, and distribution, as well as lack of familiarity with market dynamics. Producers were unable to access finance to buy inputs, animal drugs, and veterinary services, or upgrade their production facilities to scale up production. 

To address these constraints, Orora Wihaze engaged the Association of Microfinance Institutions of Rwanda (AMIR) and together, they provided technical assistance and training on livestock value chain financing for Savings and Credit Co-operatives (SACCOs) and microfinance institutions. Jackson Kwizera, AMIR Executive Director, stressed the importance of increasing the skills of both market actors and lenders on livestock financing: “Agriculture is the backbone of the country, so it is important to help provide the special skills needed to serve actors in the livestock value chain.” 

These training sessions have enabled SACCOs and microfinance institutions to better support farmers, businesses, and co-operatives seeking investment. As part of these efforts, AMIR developed and piloted financial products specifically tailored to livestock value chain with the SACCOs, which has significantly improved the appetite to finance these businesses. 

Orora Wihaze’s trainings covered topics such as risk assessment in livestock value chain, insurance, financing approaches and framework, basic appraisal and monitoring, regulatory compliance and market analysis to help institutions make informed lending decisions. Furthermore, the sessions enhanced customer service and promoted financial literacy, increasing knowledge and effective loan disbursement practices.

For example, before the training and business-to-business (B2B) linkage meetings in 2021, the Orora Wihaze Activity recorded a total loan of USD 43 thousand disbursed by financial institutions to market actors engaged in livestock value chain. After the training and B2B linkage meetings, towards the end of 2023, the loans disbursed increased significantly to USD 4 million.

Boosting Financial Literacy for Entrepreneurs

Empowering small livestock value chain actors with the knowledge to manage their finances, navigate investment options, and understand credit is crucial for spurring investment demand. RIM collaborated with Orora Wihaze to mobilize and engage livestock market actors through awareness campaigns to build capacity on inclusive financial services.

Jean Marie Sindibona is one of the many entrepreneurs that benefited from these changes. He is the owner and Managing Director of a pig production business, A-Z Pig Ltd, in Rwanda’s Gakenke District. He started his business with ten pigs in 2021. Soon after, he decided to expand into pork processing, but lacked the capital. 

In 2022, the Orora Wihaze activity linked Mr. Sindibona with RIM. Through the partnership, he took a training session on financing opportunities, and later managed to secure a loan to fund his dream. Mr. Sindibona now has a first-of its kind pork processing facility that meets both hygiene and environmental standards required for food certification, enabling product sales in the four outlets in two districts — Gakenke and Burera. Towards the end of 2023, A-Z Pig Ltd made sales equivalent to USD $24,000 from various pork products sold on the local market.

The Digital Revolution: A Game-Changer

Orora Wihaze is also supporting RIM to adopt digital technology that enhances efficiency of loans appraisal, tracking, and recording — making it much easier for entrepreneurs to access loans in a timely manner. The digital revolution is expected to accelerate and facilitate product diversity to improve access to finance and investments and create a better banking experience for small livestock value chain producers and market actors. This technology helps address the supporting function element within the livestock market systems to bring down the cost of the loan appraisal process. Furthermore, the digital tools will allow women and youth to connect with online resources and participate in the digital economy. The transition from traditional paperwork to digital technology will bridge the digital gap, fostering inclusivity and enhancing overall engagement for both women and youth.

Inclusive Finance: A Shared Responsibility

Amidst the evolving agriculture landscape, the journey towards inclusive livestock financing is a shared responsibility. Development implementers must promote financial education, customize financial solutions, leverage technology, and foster collaboration. Through Orora Wihaze, we are finding ways to dismantle barriers to financial opportunities, recognizing that it’s about more than just monetary transactions. It’s about enabling innovative ideas and creating an environment where every business has the opportunity to thrive equally.