The Islamic Bank of Guinea (BIG), in collaboration with the Office of the Prime Minister’s Delivery Unit (DU), has extended an Islamic finance product known as ‘Mourabaha’ to pineapple planters in the region so they can acquire fertilizer and irrigation material.
The move is part of a pooled procurement drive by the Federation of Fruit Planters of Lower Guinea, an agriculture-based development organization.
The product offers terms and conditions that are particularly advantageous, specifically a reimbursement calendar aligned with harvest dates.
Services rendered include a grace period which can be extended to 18 months and a preferential financial cost at a margin of 7.5% over 18 months for the fertilizer and a margin of 15% over 36 months for the irrigation material.
This new partnership between the BIG and the Federation is a result of the pineapple value chain initiative being implemented by the DU and the Ministry of Agriculture.
It addresses the working capital challenge that small producers face when trying to access inputs like fertilizer and irrigation kits – a challenge that was identified as one of the main barriers to increasing production and improving yields.
The lender noted that the Islamic finance product conceived for an organization of farmers should make it easier for the Guinean pineapple producers. For its pilot phase, a group of planters in Guinea’s Kindia and Maferenyah regions have signed up for the service.
“We want this pilot phase to have a ripple effect, to encourage other planters to join the mechanism and be supported by the Federation to grow quality fruit,” commented Moussa Camara, President of the Federation, as he was receiving a cheque from the BIG for the purchase of fertilizer this week.
Guinea’s DU and the country’s Ministry of Agriculture who developed the financing mechanism and who support the Federation with the implementation, are working on the sustainability and expansion of this mechanism. Technical partners including the COLEACP, Winrock and CNFA have been mobilized to support the Federation in its activities of technical assistance to farmers and management of the credit cycle.
In total, the BIG has secured an envelope of close to 2 billion GNF ($220,000) to support the Federation.
“We are very happy to have developed a good relationship with the Federation of Fruit Planters of Lower Guinea and we are planning to make this relationship mutually beneficial,” said Aguibou Barry, the Head of the BIG branch in Kindia.
The DU aims to accelerate the implementation of Government flagship initiatives through the development and incubation of effective, sustainable, and results-oriented implementation and governance approaches.
The DU’s pilot projects are focused on agriculture, mining and leadership development. In the agriculture sector, the DU’s interventions, in collaboration with the Ministry of Agriculture and the Ministry of Commerce, focus on revitalizing the country’s pineapple industry and on supporting Guinea in reclaiming its leadership position in international markets.