Family Bank has partnered with USAID’s Kenya Investment Mechanism, planning to disburse Sh500 million in loans to agribusinesses in 17 counties over the next year.
Kenya’s agriculture sector is the backbone of the country’s economy, accounting for roughly 33% of the country’s GDP. However, total lending to agriculture businesses by financial institutions remains limited.
The bank aims to provide financing through the dairy, horticulture, livestock, and energy value chains through an initiative called “Pay for Results.”
Makueni, Kitui, Taita Taveta, Isiolo, Marsabit, Turkana, Garissa, Wajir, Homa Bay, Migori, Kisumu, Siaya, Kakamega, Bungoma, Busia, and Vihiga counties are among those targeted by the Bank.
“The agri-business sector faces challenges accessing affordable credit and technical support. Through this partnership, we will provide affordable credit and capacity building to our SME customers to nurture sustainable agri-businesses,” Family Bank CEO Rebecca Mbithi.
Rebecca added that such private partnerships are critical, particularly in light of the COVID-19 restrictions on Kenya’s agricultural sector, in order to ensure the food supply chain’s timely and uninterrupted activity.
“We are glad to have Family Bank join us to address the low lending to agriculture,” said Roger Bird, Kenya Investment Mechanism Chief of Party.
“We are constantly looking for partnerships with organizations that are eager to finance agribusiness. Through this partnership with Family Bank, we will create new financing products that better fit the cash collection cycle of agribusinesses in the selected counties.”
Family Bank recently announced a fodder financing agreement with Performeter Agribusiness and the Ndumberi Dairy Farmers Co-operative Society, doubling dairy farmers’ regular milk production to 30,000 litres.
Kenya Investment Mechanism is a USAID program that, in collaboration with banks and other financing institutions, unlocks resources for SMEs and smallholder farmers in Kenya and East Africa.
The initiative is being launched by Palladium, a multinational company that works with foundations, investors, governments, companies, communities, and civil society to develop strategies and implement solutions that have long-term social, environmental, and financial benefits.