•The sector employs more than 40 per cent of the total population and 70 per cent of the rural population.
•The agriculture sector contracted by 1.5 percent in the first half of 2022.
Faulu Microfinance bank has set aside Sh1.5 billion to finance farmers in acquisition of farm and livestock inputs.
The funds will be distributed in partnership with more than 100 Agrovet shops branded as Faulu Kilimo Centers where farmers will visit and get financing for inputs.
According to the lender the financing model will ensure farmers access quality inputs and minimise the diversion of loan funds to other competing needs.
Rising input prices, climate change and limited market access have left many smallholder farmers struggling to earn enough to feed their families and meet planting expenses for new seasons.
Faulu Microfinance Bank Managing Director Apollo Njoroge said among the new measures, the bank seeks to offer flexible and affordable agribusiness loans repayable in bullets or through moratoriums to farmers.
“This will align with various seasons of livestock and crop farming, and will also support farmers to access affordable and flexible financing and insurance solutions,” said Njoroge.
Besides crop farmers, livestock farmers will be funded loans to purchase livestock, animal feeds and construction of animal structures. The bank will also extend insurance services.
According to recent data from the Food and Agriculture Organisation- (FAO) Kenya’s agriculture sector is a major contributor to the economy, accounting roughly 50 percent of GDP (including linkages), export revenues (60 percent).
In addition, the sector employs more than 40 per cent of the total population and 70 per cent of the rural population.
This has led to the stagnation of agricultural productivity in recent years as smallholder farmers and agricultural enterprises continue to face challenges growing their businesses and improving the quality of agricultural goods.
The World Bank in its 26th edition of the Kenya Economic Update said that the agriculture sector contracted by 1.5 percent in the first half of 2022 and, with the sector contributing almost one fifth of GDP, its poor performance slowed GDP growth by 0.3 percent.