Co-operative Bank of Kenya has enlisted 400,000 farmers on its online marketplace called Co-op Bank Soko, which brings together agricultural sector players to help producers get better prices, among other objectives.
The platform was formed in February 2021 in a partnership with MasterCard and Rabobank –a Dutch multinational banking and financial services provider.
“We onboarded 400,000 farmers on the digital platform ‘Co-op Bank Soko’, an online marketplace that enables farmers to receive a higher price for their produce, buy better quality inputs and get access to Co-op Bank’s financial services,” the bank says in its latest annual report for the year ended December.
“It brings together farmers across various value chains, input providers and buyers of produce.”
The Nairobi Securities Exchange-listed lender has strong connections in the agricultural sector, which has many savings and credit co-operative societies catering to farmers producing tea, coffee and milk, among other commodities.
The bank says the platform is aimed at leveraging technology to promote the financial and economic inclusion of small-scale farmers while generating revenue for them.
The bank is offering loans to farmers registered through the platform where they’ll be able to redeem farm inputs from suppliers onboarded.
Data from the Central Bank of Kenya shows the agricultural sector contributes 21.2 percent of Kenya’s gross domestic product (GDP).
The sector employs more than 40 percent of the population and 70 percent of the rural residents, which mostly organise their economic activities through the co-operative movement.
Co-op Bank has been leveraging its relationships in the co-operative movement to support small-scale farmers overcome barriers in market linkages, produce prices, quality inputs, infrastructural and logistics and access to financial services.
The lender says it is targeting one million farmers to help them receive higher prices for their produce and better inputs.
A Central Bank of Kenya survey showed farmers cited high input costs (24 percent) and weather patterns (15 per cent) as the main factors affecting agricultural production.
Others said a lack of market (six percent), cartels in the chain of production (six percent) and poor roads to the farms (12 percent) as some of the challenges they are facing.
Smallholder farmers suffer from affordability barriers in acquiring goods and services for production.
Access to credit, insurance services, and remunerative income are some of the other challenges farmers in Kenya are facing.
Co-op Bank will also provide financing for potato farmers who want to grow the variety of the tuber required by major food outlets such as Kentucky Fried Chicken.
The listed lender is one of the five companies that have formed a Potato Consortium bringing together firms that have expertise in all matters of the tuber in what is aimed at guaranteeing the value chain, from the quality of seed, to farmer financing and ensuring that food is of the highest quality of standards that is preferred by modern restaurant chains.
