Family Bank will extend KSh 6 billion credit to 17 counties to help small farmers in 17 Kenyan counties for the next year. The funding is through USAID’s Pay for Performance initiative under the Kenya Investment Mechanism program.
The initiative targets businesses across the agricultural value chains such as dairy, horticulture, livestock and energy sectors.
The first stage of the initiative targets businesses in Homa Bay, Migori, Kisii, Kisumu, Siaya, Kakamega, Bungoma, Busia, Vihiga, Kitui, Makueni, Taita Taveta, Isiolo, Marsabit, Turkana, Garissa and Wajir counties and its environs.
“We are committed to extending our support both through affordable credit and capacity building to enable sustainability to businesses more so those in the agriculture sector,” said Family Bank Chief Executive Officer Rebecca Mbithi.
KIM is a five-year USAID project that is facilitating $400 million in investment for key sectors of Kenya’s economy, including agriculture, and for regional trade and investment opportunities under the Prosper Africa initiative.
KIM uses smart incentives to mobilize finance for development in targeted sectors including agriculture (supported by Feed the Future), clean energy (supported by Power Africa), and women-owned businesses as well as in the health, water, and trade sectors.
The Ministry of Agriculture in Kenya indicates that climate change over the years has worsened weather-related risks such as droughts, floods, pests and diseases, exposing farmers to huge losses.
Estimates from the ministry show that the economy lost KSh 1.33 trillion as a result of extreme drought between 2008 and 2011 with the livestock sub-sector accounting for 72 per cent of this loss.
The bank had earlier in the year through the same program extended KSh500 million to support agribusinesses as part of USAID’s effort to unlock KSh40 billion to SMEs in Kenya and East Africa.