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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.

Agricultural Credit in Kenya – Sources of Funds

Agricultural Finance Corporation (AFC): The Agricultural Finance Corporation is the leading Government Credit institution in Kenya mandated to provide credit for the sole purpose of developing agriculture. AFC develops agriculture and agricultural industries by giving loans to farmers, co-operative societies, incorporated groups, private companies, and public institutions.

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. AFC provides cheapest agricultural loans in the country with interest rates ranging from 5% to 10%.

AFC provides the following credit facilities:-

  • Cash crop loans
  • Horticulture & Floriculture loans
  • Seasonal crop credit
  • Agri-business loans
  • Machinery loans
  • Sugarcane Development Fund

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.

Youth Enterprise Development Fund: This fund is specifically for providing loans to the youths. The main reason for it’s establishment was to reduce unemployment among the youth.

Uwezo Fund: This is the cheapest credit available among women and youth groups since no interest is charged on loans.

Women Enterprise Fund: This is a semi-autonomous government agency established to help women start businesses and expand the already existing ones for wealth and employment creation.

International Fund for Agricultural Development (IFAD): The IFAD and the Government of Kenya have started a smallholder dairy commercialization Project in a number of regions. IFAD has given millions of shillings to the government for the Project.

Savings and Credit Cooperative Societies: They provide credit facilities sometimes depending on ones’ savings at low interest rates.

Micro Finance Institutions: such as the KWFT, SMEP Micro finance among others.

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