AFC chairman Franklin Bett said they are creating provisions that will enable the agency to restructure the debt, which will be done on a case-by-case basis.
Commercial banks have also been restructuring customer loans for those who were unable to pay due to the pandemic.
The Central Bank of Kenya (CBK) said last month that by the end of August, banks had restructured loans amounting to Sh1.12 trillion, equivalent to 38 percent of the total banking sector loan book of Sh2.9 trillion.
The Agriculture Finance Corporation (AFC) plans to restructure most of its Sh8.7 billion loans to give farmers who have defaulted a chance to repay following difficulties that have been occasioned by the Covid-19 pandemic.
AFC chairman Franklin Bett said they are creating provisions that will enable the agency to restructure the debt, which will be done on a case-by-case basis.
“We are creating provisions that could see AFC restructure most of its Sh8.7 billion loan book with farmers getting a moratorium on case by case basis,” said Mr Bett.
Commercial banks have also been restructuring customer loans for those who were unable to pay due to the pandemic.
The Central Bank of Kenya (CBK) said last month that by the end of August, banks had restructured loans amounting to Sh1.12 trillion, equivalent to 38 percent of the total banking sector loan book of Sh2.9 trillion.
The moratorium was a result of a harsh economic environment and limited cash flow in the economy occasioned by measures aimed at containing the spread of the coronavirus.
Mr Bett said it is important for farmers to be financed adequately in this harsh economic time to reduce the cost of agricultural production and increase yields.
AFC outgoing managing director Lucas Meso said the agency has also created a platform that will increase money that is advanced to women as they play a critical role in food production in the country.
The institution has designed the Women Affirmative Access Window (WAAW) programme to drive financial inclusion in agricultural finance.
He said this special window will open up funding for women and advance up to Sh1 billion to them in the next two years, without having a form of collateral.
“AFC aims to enhance access to agricultural finance by women across the value chains by increasing loans advanced to women to approximately Sh1.4 million per day or Sh1 billion in a calendar year,” said Mr Meso.
Of the total AFC portfolio, women are the minority accounting for only 25 percent despite their loans being much more productive than those of their male counterparts.
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