More than 10, 000 farmers in 12 counties are in line to get loans under a Sh100 million credit facility between Faulu Bank and US Agency for International Development (USAID).
The one-year credit facility is meant to ease access to credit and follows a deal between microlender Faulu Bank and the USAID-funded Feed the Future Kenya Crops and Dairy Market Systems Activity (KCDMS).
Faulu Bank will provide the Sh100 million while USAID is pumping Sh12.9 million that Faulu Bank will use to recruit and train staff tasked with checking the credit risks and portfolios of the farmers seeking a share of the loans.
More than 10, 000 farmers in 12 counties are in line to get loans under a Sh100 million credit facility between Faulu Bank and US Agency for International Development (USAID).
The farmers are spread across the counties of Migori, Homabay, Kisumu, Kisii, Siaya, Bungoma, Kakamega, Vihiga, Busia, Kitui, Makueni and Taita Taveta.
The one-year credit facility is meant to ease access to credit and follows a deal between microlender Faulu Bank and the USAID-funded Feed the Future Kenya Crops and Dairy Market Systems Activity (KCDMS).
Small-scale farmers continue to grapple with difficulties in getting loans from banks hurting their efforts to acquire costly farm inputs like seeds, fertilsers and use technological innovations to boost productivity.
“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 to flag off challenges in their farming journey,” Faulu Bank Managing Director Apollo Njoroge said.
Faulu Bank will provide the Sh100 million while USAID is pumping Sh12.9 million that Faulu Bank will use to recruit and train staff tasked with checking the credit risks and portfolios of the farmers seeking a share of the loans.
The microlender says that providing loans to small-scale farmers is one of its key planks of ramping up its customer base, especially in rural areas.
Mr Apollo did not disclose the interest rates for the loans and how much a farmer will be allowed to tap in the latest effort to ease credit access to the farmers.
Kenya like other African countries relies on small-scale farmers to produce up to 80 percent of the food but their efforts face a 90 percent chance of crop loss due to factors beyond their control such as pest outbreaks and severe drought.
The deal with Faulu Bank adds to USAID’s efforts to help farmers get access to loans and help them acquire farm inputs to boost their production.
USAID-KCDMS programme is already supporting more than 40, 000 farmers in other counties to access loans and train them on financial literacy.
