Agricultural Credit in Kenya

Provision of credit in Kenya has helped many farmers boost production and use better methods. Some financial institutions provide credit for agricultural development.

The Agricultural Finance Corporation is a Government non-bank financial institution mandated to develop agriculture and agricultural industries by giving loans to farmers, co-operative societies, incorporated groups, private companies, public institutions and the local authorities.

AFC provides financial services for the development of agriculture. It provides loans for financing mobile farm equipment, fish farming and processing and related businesses and ranch development, including pasture establishment and improvement The Government intends to increase the loan portfolio for AFC to Sh3.2 billion ($42.6 million) so that more farmers can access credit.

AFC loan portfolio is expected to increase to Sh6.2 billion (S82.6 million) by 2012. Commercial banks also provide credit to farmers. The project started in November 2005 and was implemented by the Agricultural Development Corporation (ADC). Agricultural Sector Programme Support helps the Government in the transition where the private sector is the vehicle for economic growth, while the public sector provides a conducive environment. The objective is to increase income for smallholder farmers and agri-based micro and small enterprises in arid and semi-arid districts.

The International Fund for Agricultural Development and the Government has started a smallholder dairy commercialization Project in a number of districts. IFAD has given millions of shillings to the government for the Project.

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