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Media Center > Speeches > HON. MINISTER MAHENDRA REDDY AT THE LAUNCH OF THE FIJI DEVELOPMENT BANK'S FAMILY LOAN FACILITY

HON. MINISTER MAHENDRA REDDY AT THE LAUNCH OF THE FIJI DEVELOPMENT BANK'S FAMILY LOAN FACILITY

12/6/2018
FDB Board Director, Mr. Wella Pillay,
FDB Management & Staff,
Government Ministry Representatives,
Stakeholders,
Members of the media, and
Our Fijian Families – fathers, mothers and dear children,

Bula Vinaka and a very good morning to you all.

It is my pleasure to be here this morning to launch the Fiji Development Bank’s [FDB] Agriculture Family Loan Facility and I wish to thank the management of FDB for inviting me to officiate the event and that too, in friendly north, one of my favorite place.

Ladies and Gentlemen, today’s event is centered around an agrarian household, an agrarian family. Any project or initiative that’s intention is to make a positive impact of an agrarian household is commendable given that these households often get left out from the standard mainstream growth and development plans.

From Government’s perspective, creating the conditions for inclusive prosperity, one that seeks to grow together, requires strategic policy intervention and collaboration with stakeholders like FDB.

Globally, the path to inclusive prosperity is clearly marked by the 2030 Agenda for Sustainable Development. At the heart of the Agenda are the 17 Sustainable Development Goals (SDGs), which are an urgent call for action by all countries in a global partnership.

They recognize that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests.

As the principal connection between people and the planet, food and agriculture can support the achievement of multiple SDGs.

Ladies and Gentlemen,

The international development community recognizes agriculture as an engine of growth and poverty reduction in developing countries.
The Fijian Government sees increases in productivity in the agricultural sector playing multidimensional roles.

These include increasing productive employment, stimulating growth, increasing sustainability and hence enabling the positive and inclusive transformation of the economy.

Any efforts to expand this sector has a remarkable attribute in terms of reaching out to those who generally are unskilled, have low levels of education and live in areas far away from urban centres where benefits of both private and public sector investment trickles down to the owners of the various factors of production.

Government is seriously looking at leveraging agricultural growth and production, widening, deepening, diversifying, and modernizing it.

Our quest to do this is for a number of reasons. As alluded to earlier, it has an amazing ability to improve livelihood for all those engaged in it, farmers, laborers and others who will be inked to it via the factor market.
We wish to expand agriculture as we see this sector having potential to grow our national income on a sustainable basis.

We wish to expand agriculture as we see it as an industry where we may have a competitive advantage.

We wish to expand agriculture as we wish to utilize vacant land which at the moment provides no return to owners of this natural capital.

We wish to expand agriculture as it will carry with it, and develop our women and youths.

We wish to expand agriculture within rural areas as well as spill out in peri-urban and urban areas as we see it playing a major role in terms of contributing to our food security objective.

We wish to expand agriculture as we see this sector as one of the most resilient sectors hedged against any financial sector crisis.

We wish to expand this sector to contribute towards income stability of all households in Fiji.

We wish to expand agriculture because visibility of the agrarian community can play a important role in raising the consumption of vegetable products which can reduce the incidences of NCDs significantly.

However, ladies and gentlemen, the binding constraints to expansion of this sector cannot be provided for by the public sector alone. We need all key stakeholders to play their respective strategic roles so that we can leap forward and take this sector to greater heights.

A key binding constraint is provision of financial services.

Breaking the barriers, expanding and modernizing the agriculture sector and introduction of new technologies requires finance injection.

The existing entrepreneurs who are not able to mobilise their own savings or do not have any assets to use as a collateral to obtain loans from the banking institutions may thus find it impossible to survive in a competitive industry. While one may say that all farmers can use their land for collateral, but this may not be possible in the case of Fiji as significant number of farmers may not be holding a formal lease or title of the land which can be transferable should the lending institution get to that stage.

Hence we will need to arrive at a suboptimal solution to deal such imperfect factor markets.

It is in this regard that I applaud today this innovative solution developed and offered by The Fiji Development Bank named “FDB Agriculture Family Loan Facility”.

I have much pleasure in launching this product because FDB’s Agriculture Family Loan is a multi-dimensional solution to achieving sustainable agriculture in Fiji, rural development and contributes towards the Government’s financial inclusion agenda.

The product is designed for experienced Fijian farming families.
That is, the loan will be offered to a family: husband, wife and eligible child to be involved in the loan and share the skills set and responsibilities.

The product is specifically designed for families who have a viable farming business on communally owned land, estate or private owned land with consent given by the land owning unit.

With assistance through the Ministry of Agriculture grants, many Fijian families are able to start their farming business at semi-subsistence level, but to expand farm development into semi-commercial level for farmers without lease remains a major constraint to accessing finance.
The new product is targeted at customers identified as subsistence, semi-commercial and commercial farmers with more than 10 years farming experience and established market.

Loans will be available for land development, farmhouse, and infrastructure such as farm inroads, water supply, renewable energy and irrigation to approved experienced farmers with no lease across Fiji.

For those whose loans will be approved, the Bank will deliver financial literacy and management skills training. FDB’s Be Financially $mart booklet is designed to promote and develop entrepreneurial and business skills and capacities of farming families and SMEs that will be fundamental to their full market participation, and to take advantage of new opportunities. In fact, as a lead up to this launch, I understand that the FDB has collaborated with the Ministry of Agriculture Extension Services and Research, the Ministry of i-Taukei Affairs and the International Fund for Agriculture Development Fiji (IFAD) that will culminate in the FDB Agriculture Family Loan Facility awareness session scheduled for later this afternoon and tomorrow before the actual hard work really begins.

Ladies and gentlemen, I note that details of the product will be provided to you all in detail by FDB’s General Manager Relationship & Sales, Mr. Shaukat Ali in a while.

In conclusion, I am convinced that the product aims to contribute to our national agricultural development strategy in improving the livelihoods of smallholder farmers by accessing inputs and modern technologies, strengthening their linkages to markets, improving access to information, research, and knowledge.

This product creates the right environment for the farmer to launch into a new era of modern agriculture not only to expand their production base, but to also remain competitive.

The product will assist us meeting the 2020 Agricultural Sector Policy Agenda and advances the Government’s 5-Year and 20-Year National Development Plan for Inclusive Socio-Economic Development. This includes contributing to goals such as reducing unemployment rate to below 4 percent, eradicating poverty, and ensuring food security for all Fijians with women, youths and children included in decision-making and generating youth’s interest in farming from an early age.

I now have much pleasure in launching the Fiji Development Bank’s Agriculture Family Loan Facility.

Grow as a Family with the FDB Agriculture Family Loan Facility.

Thank you very much, Dhanyavad & Vinaka Vakalevu.
 
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