KENYA – Kenyan commercial bank, Family Bank, has announced that it will release Ksh. 6 billion (US$52.9m) to be extended as affordable credit to agribusinesses across 17 counties through the USAID’s Pay for Performance initiative under the Kenya Investment Mechanism program.
This targets businesses across the agricultural value chains such as dairy, horticulture, livestock, and energy sectors, among others, for the next one year in Homa Bay, Migori, Kisii, Kisumu, Siaya, Kakamega, Bungoma, Busia, Vihiga, Kitui, Makueni, Taita Taveta, Isiolo, Marsabit, Turkana, Garissa and Wajir counties and their environs.
“Despite the agricultural sector being a great contributor to the country’s economy, the challenges faced by the sector continue to hinder growth.
“As a bank, we recognize the finance need for agribusinesses to scale climate-smart agriculture technologies to enhance the climate resilience for agricultural value chains,” said Family Bank Chief Executive Officer Rebecca Mbithi.
Kenya’s Ministry of Agriculture says climate change has over the years worsened weather-related risks such as droughts, floods, pests, and diseases, exposing farmers to huge losses.
Estimates from the ministry show that the economy lost Kshs.1.33 trillion (US$11 billion) as a result of extreme drought between 2008 and 2011 with the livestock sub-sector accounting for 72 percent of this loss.
“Agriculture is not only critical for our food supply but it is the foundation upon which we build societies that are more resilient and better equipped to deal with disasters.
“As a Bank, we are committed to extending our support both through affordable credit and capacity building to enable sustainability to businesses more so those in the agriculture sector,” she added.
Kenya Investment Mechanism is a USAID program that unlocks capital for SMEs and smallholder farmers in Kenya and East Africa, in partnership with banks and other financing organizations.
The program is implemented by Palladium, a global firm that works with foundations, investors, governments, corporations, communities, and civil society to formulate strategies and implement solutions that generate lasting social, environmental, and financial benefits.
The bank had earlier in the year through the same program extended Ksh. 500 million (US$4.4m) to support agribusinesses as part of USAID’s effort to unlock KES 40 billion to SMEs in Kenya and East Africa.
In addition, Family Bank entered into a fodder financing agreement with Performeter Agribusiness and Ndumberi Dairy Farmers Co-operative Society that is set to double dairy farmers milk production to 30,000 litres per day.