Agricultural sector stakeholders have revealed that the sector’s funding gap is currently at Sh2.94 trillion.
This was brought to light in a meeting in Nairobi aimed at exploring financing of the sector and appropriate models for funding their activities in Kenya.
The conference comes amid fears of a large discrepancy between GDP contribution from agriculture to that of loans and investments portfolios being re-invested into the industry.
Despite being the single largest contributor to Kenya’s GDP and employing more than 40 percent of the total population and 70 percent of the rural Kenya population, the sector is the least funded of the economy whose gross loans account for only 3.6 percent of total lending.
The FINAS 2024 conference bringing together state and private sector players is planning to take stock of the country’s ongoing financing options for the agricultural sector, including bottlenecks.
The conferences’ director Kawira Mutegi said that the experts will propose ways of accurately determining the level of agricultural financing, to inform effective policies and provide a one-stop shop where small, medium, and large agricultural enterprises can interact with financing solution providers.
“With Kenya's agricultural sector playing a pivotal role in the country's economy and livelihoods of millions, it is imperative to explore avenues for sustainable growth while addressing challenges such as climate change, food security, and economic resilience and ready the agricultural sector for business,” said Mutegi.
Prime Cabinet Secretary Musalia Mudavadi, said that Kenya is now ready for a remodeled financing mechanism that promises better days for the Agricultural sector.
“Our country's fourth medium-term plan 2023-2028 outlines the key policies, programmes and projects that the government plans to implement to support growth and transformation of this important sector of our economy,” said Mudavadi.
Among the plan’s priority projects, is the Agricultural and Rural Financial Inclusion Project, which aims to enhance access, efficiency and stability of agriculture and rural finance.
“The outcomes of the FINAS 2024 conference are expected to be a validated resource for government and private sector to enable design and planning for resourcing initiatives in the agricultural sector,” added CS Ministry of Agriculture and Livestock Development Mithika Linturi.
