Kenya and the International Agricultural Development Fund (FIDA), a specialized agency of the United Nations, on Thursday established a US$134.05 million fund aimed at improving access to finance for smallholder farmers.
Chris Kiptoo, Principal Secretary to the National Treasury and Economic Planning, said that the Kenya Rural Financial Inclusion Facility Project (RK-FINFA) would better mobilize resources from private financial institutions and partner development institutions for allocation to the agricultural sector.
“This will lead to an increase in financial resources at the bottom of the development pyramid while strengthening the climate change resilience of actors in the agricultural value chain,” said Mr. Kiptoo.
He said the mechanism should benefit 190,000 rural Kenyan households both directly and indirectly.
The facility will feature a rural credit guarantee system that will help reduce the perceived and real risks associated with agricultural value chain lending, Mr. Kiptoo added.
Mariatu Kamara, FIDA Country Director and Representative for Kenya said the facility would also provide technical assistance to agricultural value chain players to help them improve their production, marketing, and various other business practices.
How will the $134 million UN funds be utilized to improve farmers’ access to finance in Kenya?
The $134 million UN funds allocated to improve farmers’ access to finance in Kenya will be utilized in various ways, including supporting initiatives that link smallholder farmers to banks and other financial institutions to increase access to financing, and to improve the quality and supply of agricultural inputs.
Improving farmers’ access to finance is crucial for increasing agricultural productivity, reducing poverty, and promoting sustainable development in Kenya. By linking smallholder farmers to banks and other financial institutions, these initiatives can help farmers access credit, purchase agricultural inputs, and improve their yields.
Additionally, providing training, mentorship, and seed funding can help augment the livelihoods of youth in Kenya by providing access to invaluable networks and resources.