The bank commits to disburse KES 500 million to agribusinesses in the next one year, as part of the USAID’s effort to unlock KES 40 billion to SMEs in Kenya and East Africa.
Family Bank has entered a partnership with USAID’s Kenya Investment Mechanism, committing to disburse loans worth 500 million shillings to agribusinesses in selected 17 counties in the next one year.
Through an initiative dubbed ‘Pay for Results’, the bank targets to provide financing across dairy, horticulture, livestock and energy for agriculture value chains. The Bank is targeting Homa Bay, Migori, Kisii, Kisumu, Siaya, Kakamega, Bungoma, Busia, Vihiga, Kitui, Makueni, Taita Taveta, Isiolo, Marsabit, Turkana, Garissa and Wajir counties.
“The agri-business sector faces challenges accessing affordable credit and technical support. Through this partnership, we will provide affordable credit and capacity building to our SME customers to nurture sustainable agri-businesses,” said Family Bank Chief Executive Officer Rebecca Mbithi.
“Such private partnerships are important, especially in the wake of the COVID-19 constraints on the Kenyan agricultural market in order to ensure timely and continued operation of the food supply chain,” she added.
The agriculture sector forms the backbone of Kenya’s economy, with an approximate contribution of 33 per cent to the country’s GDP. However, overall lending by financial institutions to agriculture businesses remains low.
“We are glad to have Family Bank join us to address the low lending to agriculture,” said Roger Bird, Kenya Investment Mechanism Chief of Party. “We are constantly looking for partnerships with organizations that are eager to finance agribusiness. Through this partnership with Family Bank, we will create new financing products that better fit the cash collection cycle of agribusinesses in the selected counties.”
This partnership comes barely a month after Family Bank entered into a fodder financing agreement with Performeter Agribusiness and Ndumberi Dairy Farmers Co-operative Society that is set to double dairy farmers milk production to 30,000 litres per day.
Kenya Investment Mechanism is a USAID program that unlocks capital for SMEs and smallholder farmers in Kenya and East Africa, in partnership with banks and other financing organizations. The program is implemented by Palladium, a global firm that works with foundations, investors, governments, corporations, communities, and civil society to formulate strategies and implement solutions that generate lasting social, environmental, and financial benefits.