The agricultural sector remains one of the leading economic sectors in Kenya. According to the Kenya Bureau of Statistics (KNBS), agriculture contributes 27% to 33% of Kenya’s GDP and another 27% of GDP indirectly through linkages with other sectors. However, Kenya’s agricultural sector continues to face numerous threats from changing weather patterns, invasion of pests like locusts, accelerated growths in mining, real estate and quarrying taking over agricultural land, and now the COVID-19 pandemic. Despite these threats, agriculture remains a crucial part of the economy that needs endless support now more than ever. Family Bank has been instrumental in extending support to this sector which forms the backbone of the economy.
The Agricultural Industry Network, an association that brings together Business Member Organizations (BMO) that represents over 5 million farmers, actors and players in the agricultural sector countrywide, recently organised a webinar dubbed Reflections on Agricultural Reforms and Emerging Technologies. The webinar sought to educate its members on the status of ongoing reforms in Kenya’s agricultural sector, international best practices on agricultural technologies and explored various options available from the banking sector to address access to finance, a critical challenge within the sector.
Speaking during the webinar, Family Bank Agribusiness Manager Anthony Mbithi stressed the need for and importance of amplifying the agricultural transformation agenda through agrifinance initiatives.
“Despite this being a crucial sector for our economy, access to tailor-made and affordable credit remains a challenge. As a Bank we have set out to provide farmers in different agriculture sub-sectors with finance initiatives”, he said.
The Bank has signed partnerships with several organizations aimed at solving the critical challenge of access to capital. Through a partnership with Performeter Agribusiness, the Bank set aside KES 1 billion to finance fodder production to boost milk yield for dairy farmers and improve their living standards. In addition, a KES 500 million partnership with Palladium, through an initiative dubbed ‘Pay for Performance’ under USAID’s Feed the Future Program, is helping to finance agri-businesses in dairy, horticulture, livestock and energy for agriculture value chains to boost agriculture-led growth, resilience and nutrition across in 17 counties. The partnership surpassed its target within the first three months and led to a target extension from KES 500 million to KES 6 billion.
Family Bank has also partnered with Aceli Africa to provide $40 million in financial incentives to improve the economics of agri-SME lending and another $10 million in technical assistance to SMEs.