Farmers have ditched the State’s Hustler Fund and microfinance banks, turning to big banks and Fuliza for credit to finance agricultural activities.
A new Central Bank of Kenya (CBK) survey shows that 11 percent of farmers who were borrowing from the Hustler Fund as of March 2025, and 13 percent who borrowed from microfinance institutions, had dropped off from the products by May.
The survey shows that no farmer interviewed in May indicated having borrowed from the two products, even as they also stopped borrowing from cooperative societies and informal lenders.
“The proportion of sampled farmers reporting to have accessed credit for farming remained below 40 percent. It stood at 34 percent in May 2025 and 36 percent in March 2025,” the survey stated.
The CBK’s May Agricultural Survey shows that the majority of farmers have shifted to borrowing from banks at a time when banks have been lowering interest rates on loans, under pressure from the CBK.
The proportion of farmers borrowing from banks rose from 41 percent in March to 58 percent in May, as more farmers increased borrowing from digital loans such as Fuliza and KCB M-Pesa, which witnessed growth from two percent of farmers in March to eight percent in May.
The CBK survey noted that sources of credit to farmers that witnessed growth between March and May also included buyers of farm produce (11 percent to 16 percent of farmers), and informal savings and credit groups (9 to 16 percent).
Borrowing from savings and credit cooperative societies (saccos), however, dropped from 35 percent to 24 percent over the same period.
“The main sources of credit to farmers are banks, saccos, family and friends, buyers of farm produce, and digital credit providers,” the CBK survey says.
The survey paints a picture of shifting trends in the farmers’ borrowing appetite for different products, though it has not explained the causes for the trends across different lenders.
In terms of using the loans, most farmers are also going slow on using the borrowed funds to buy inputs such as fertiliser, seeds, and pesticides, with a drop from 94 percent of the farmers in March to 84 percent in May.
The proportion of farmers using loans to incur labour costs also dropped from 62 to 57 percent, even as those borrowing to buy equipment and machinery rose from 25 to 41 percent.
“Use of credit to expand farmland and diversify production ranked low,” the survey stated.
The Hustler Fund, one of President William Ruto’s pet projects, is meant to provide Kenyans at the bottom of the economic pyramid, including youth and women, access to financial services.
This includes credit, savings, insurance, and investment products for the unserved and underserved population. The fund has been issuing loans of between Sh500 and Sh50,000 to individuals for a tenure of 14 days at an interest rate of eight percent per annum.
Five percent of the disbursement to each borrower has been withheld as savings whereas 70 percent has been retained as long-term savings with the balance making up short-term savings.
