Family Bank has committed Sh 6 billion to extend affordable credit to agribusinesses across 17 counties through the United States Agency for International Development (USAID’s) Pay for Performance initiative under the Kenya Investment Mechanism program.
The program targets businesses across the agricultural value chains such as dairy, horticulture, livestock and energy sectors, among others, for the next one year 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.
The Family Bank Chief Executive Officer (CEO) Rebecca Mbithi said despite the agricultural sector being a great contributor to the country’s economy, the challenges faced by the sector continue to hinder growth.
“As a bank, we recognise the financial need for agribusinesses to scale climate-smart agriculture technologies to enhance the climate resilience for agricultural value chains,” said the CEO.
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 Sh 1.33 trillion as a result of extreme drought between 2008 and 2011 with the livestock sub-sector accounting for 72 percent of this loss.
“Agriculture is not only critical for our food supply but it is the foundation upon which we build societies that are more resilient and better equipped to deal with disasters. As a Bank, 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,” Mbithi added.
The bank had earlier extended Sh 500 million in the year through the same program to support agribusinesses as part of USAID’s effort to unlock Sh 40 billion to Small and Medium-Sized Enterprises (SMEs) in Kenya and East Africa.
Kenya Investment Mechanism is a USAID program that unlocks capital for SMEs and smallholder farmers in Kenya and East Africa, in partnership with banks and other financing organisations.
The program is implemented by Palladium, a global firm that works with foundations, investors, governments, corporations, communities and civil society to formulate strategies and implement solutions that generate lasting social, environmental, and financial benefits.