National Bank of Kenya (NBK) has launched a Sh2 billion fund that targets to loan and train farmers on new technologies, becoming the latest lender to focus on the agricultural sector.
The lender, a subsidiary of KCB Group, said on Thursday the solution dubbed Kilimo Konnect will address challenges such as working capital, equipment procurement, and post-harvest processing.
The financial solution will be supplemented with training for farmers to embrace technology-driven agricultural solutions. NBK will partner with Private Equity Support (PES), Netherlands Enterprise Agency, Endless Africa (RVO), and Grobox Limited for the training.
“We are happy to be collaborating with like-minded development partners who share our vision of supporting agri-business through capacity building and funding. Together, we can catalyse the agriculture sector to success and foster economic growth," said George Odhiambo, managing director at NBK.
“Through Kilimo Konnect, we seek to transform the agricultural landscape in Kenya, ensuring that farmers are well-equipped to meet the challenges of modern farming and thrive in a competitive market” he added.
Farmers will also tap loans to buy and install bio-digesters to enable them to convert organic waste into energy for household and farm use to reduce operational costs by using renewable energy.
NBK has offered two fully paid-up bio-digesters to select farmers and a 10 percent discount on the first 10 bio-digester loans taken up by co-operative members. The lender has also offered a one-year last expense insurance for 10 households and started a three-month pilot feed advisory services for 10 farmers.
“Working with NBK to catalyse this holistic market-based approach that provides access to finance with technical support, represents a way to utilise the bio-digester to address smallholder farmer challenges on costs of inputs and energy,” said Diana Gichaga, managing partner at PES.
Marnix Van Holland, RVO senior advisor for climate finance and energy, said the collaboration with local financiers such as NBK sets the stage to scale up the uptake of clean energy, aligning with the economic and environmental sustainability agenda.
KCB Group loans to the agricultural sector grew by 70.9 percent to Sh44.22 billion last year, taking their share in the group’s loan book to 3.7 percent from 2.8 percent a year earlier.
