US Agency for International Development (USAID) has partnered with Faulu Bank to offer loans under KSh100 million to farmers. The programme is set to benefit more than 10, 000 farmers across various selected counties(12) across the country.
Feed the Future Kenya Crops and Dairy Market Systems Activity (KCDMS) is a one-year credit facility, meant to ease access to credit. The facility will be funded from a deal between microlender Faulu Bank and the USAID.
The beneficiary farmers will be from the counties of Makueni, Taita Taveta.Kisumu, Kisii, Migori, Homabay,Siaya, Bungoma, Kakamega, Vihiga, Busia and Kitui.
Small-scale farmers continue to suffer from costly farm inputs like seeds, fertilisers and no use of technological innovations to boost productivity. The programme is meant to ease up credit accessibility by farmers to finance their farming activities.
“This partnership will not only allow us to grow our agriculture financing segment but also enable us to train at least 10,000 farmers on how to take loans, grow their revenues and how flag off challenges in their farming journey,” said Apollo Njoroge-Faulu Bank Managing Director.
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USAID will finance Faulu bank Sh12.9 million. It will be used to recruit and train staff tasked with checking the portfolios and credit risks of the farmers seeking the loans.
The Microfinance has budgeted Sh100 million which it will offer as loans to farmers.
However, the institution did not disclose loans interest rates, and the maximum amount a farmer can borrow.
Just like other African countries, Kenya relies heavily on small-scale farming, which produces up to 80 percent of the food. Unfortunately, there’s a 90 percent chance that the crop may undergo loss due to environmental factors like pests and severe weather conditions.
The microlender says supporting small-scale farmers financially is one of its goals/ Additionally, this will grow its customer base, especially in rural areas.
In other African countries, the USAID-KCDMS programme is already supporting more than 40, 000 farmers, by training them on financial literacy, later offering them agricultural loans.