Smallholder farmers in Nakuru and Nyandarua counties are set to benefit from affordable financing for cold storage facilities under a new partnership between the Agriculture Finance Corporation and DanChurchAid.
The initiative aims to reduce post-harvest losses, improve produce quality and increase farmers' incomes.
The Memorandum of Understanding (MoU), unveiled during the Financing Agri-Food Systems Sustainably (Finas) 2026 Summit at KICC, will initially finance farmer cooperatives in the two counties before being expanded to other parts of the country.
AFC managing director George Kubai said the partnership is designed to provide cooperatives with financing to invest in cold storage infrastructure, enabling farmers to preserve the quality of their produce and sell when market prices are favourable.
"This initiative is about helping farmers get maximum value from their produce by providing infrastructure that reduces post-harvest losses and maintains product quality," he said.
Kubai said the programme would begin in Nakuru and Nyandarua counties under a phased financing model before being rolled out to other regions based on its success.
He noted that Nyandarua, one of Kenya's leading potato-producing counties, has many farmers who lack adequate storage facilities, forcing them to sell immediately after harvest when prices are often low.
"Through these cooperatives, farmers will be able to use cold storage facilities to keep their produce for longer and wait until market conditions improve before selling. This will increase the value they receive from their harvest," Kubai said.
He explained the initiative is also a risk-sharing model that goes beyond financing by investing in infrastructure that strengthens agricultural value chains.
"When farmers can store their produce safely and sell at the right time, they earn better returns. This improves their ability to repay loans, making agricultural financing more sustainable while reducing lending risks," Kubai said.
He said the partnership would also promote financial inclusion by enabling farmers without conventional collateral to access credit.
Under the arrangement, Agriculture Finance Corporation (AFC) will lend to farmer cooperatives, which will in turn extend financing to their members.
"This model allows us to reach farmers who would otherwise be excluded from formal credit because they lack traditional security. By working through cooperatives as anchor institutions, we are expanding access to affordable agricultural finance," he said.
DanChurchAid Kenya country director Karen Poore said the initiative is supported by the Danish government through the Loss to Value (LTV) project, which seeks to help smallholder farmer cooperatives adopt cold storage technologies.
She said access to cold storage would significantly reduce food losses while increasing farmers' incomes.
"We want to see less food going to waste and more income reaching farmers. For that to happen, there must be a sustainable financing model, and that is why the partnership with AFC is so important," Poore said.
According to the Food and Agriculture Organization (FAO), nearly 14 per cent of food produced globally is lost between harvest and retail. In Kenya, post-harvest losses for highly perishable crops such as fruits and vegetables can reach 30 to 40 per cent because of inadequate storage, poor handling and weak market linkages.
Under the agreement, AFC will provide financing to eligible cooperatives to enable them to invest in cold storage facilities.
Poore said the project would initially focus on cooperatives in Nakuru and Nyandarua counties before expanding to more counties.
"We hope this model can be scaled so that many more farmer cooperatives across the country can access this technology," she said.
AFC board chairman John Murutu said the corporation remains committed to financing agriculture as part of its mandate to strengthen food security and promote inclusive economic growth.
"Our responsibility is to ensure Kenyans have food while supporting economic development through agriculture. Many farmers have been left behind because they lack access to affordable capital and AFC exists to bridge that gap," Murutu said.
He said the corporation is committed to ensuring no farmer is excluded from accessing agricultural finance, adding the partnership will help empower smallholder farmers and strengthen rural livelihoods.
