Agricultural Finance Corporation (AFC) has this year, through its revolving fund, so far disbursed over Sh 3.5 billion to smallholder farmers.
AFC is a state-owned development finance institution with a history spanning close to a century and supports the development of the agricultural sector by providing accessible and affordable financial services, which includes asset-backed financing, warehouse receipt financing, and also Digital Financing.
Managing Director, AFC, George Kubai, said they have enabled the smallholder farmers, who would ordinarily be unable to access loans due to a lack of collateral, by ensuring access to credit through Micro Finance Institutions (MFIs) and SACCOs, who employ the co-guaranteeing model. 'This model allows AFC to penetrate markets and reach out to smallholder farmers to access loans as low as Sh 5,000,' Kubai, who was speaking on the power of financial inclusion at the ongoing Financing Agri-food Systems Sustainability (FINAS) Summit in Nairobi, said.
The MD however, noted that their target is around Sh 4.5 billion shillings per year and hoped that in the next month before the financial year closes, they should disburse Sh 500 million to reach their target. "Our Non-Performing Loans (NPL) are looking good; we are within the average of the development financial institutions, averaging around 14 percent, the MD confirmed Her added that AFC has been working with Ministry of Agriculture and Livestock Development on the Enable Youth program, that seeks to build entrepreneurship in agribusiness through training skill acquisition, and creating an enabling environment that empowers the youth to own profitable agribusiness ventures In terms of the inclusion, the MD further said they are also working with development partners to basically de-risk most of the youth and also the women by making sure they are included in the financial space. "The program we are running that is co-funded by the African Development Bank (AfDB) and the Government of Kenya, we have been able to capacity build and give loans to over 262 youths, with a total disbursement of Sh 259 million," he noted.
