Africa-Press – Kenya. The Agricultural Finance Corporation (AFC) is set to release Sh500 million to farmers this month as part of the Sh4.5 billion loan facility earmarked for them in the current financial year.
According to AFC managing director George Kubai, the corporation has so far disbursed more than Sh3.5 billion from the revolving fund.
“Our target is around Sh4.5 billion for this financial year and we hope in the next remaining days, we disburse Sh500 million to reach the target,” he said.
This comes even as farmers owe the corporation a backlog of approximately Sh2 billion in unpaid loans.
Kubai noted that women and youths are increasingly taking up farming loans, with the former being better payers.
“As an institution, we are always looking at how we can be able to support them more and we have gone ahead and come up with a women-only facility, a women-only product, which we basically focus on the women,” said Kubai.
“In terms of performance, that is one of our best-performing products. The interest rate for this facility is also lower compared to the rest of the facilities. We are doing our best to channel more resources to our women customers,” he added.
AFC has partnered with development partners to de-risk these loan facilities.
One such initiative is the Enable Youth Project in partnership with the African Development Bank (AFDB), which offers loans at interest rates below market levels.
“We are trying to look for more resources which can be able to point to the youth and women to make sure that they are financially included,” said the MD.
Last month, Agriculture CS Mutahi Kagwe noted the need for increased budgetary allocation to the agriculture sector. He called on the National Treasury and Parliament to boost funding in alignment with the sectors’ critical role in the country’s economic development.
“While our nominal GDP stood at Sh16.224 trillion in 2024, only three per cent of the national budget was allocated to agriculture,” said Kagwe, “Yet, the sector contributes 22.5 per cent directly to the GDP and supports up to 30 per cent through linkages with other industries.”
He urged for the allocation to rise to at least 10 per cent, in line with Kenya’s commitments under the Malabo Declaration of (2014) and the Kampala Declaration of January 2025, both of which promote agricultural investment under the Comprehensive African Agriculture Development Programme (CAADP).
Kubai noted that the dairy and livestock sub-sector dominates AFC’s loan book, accounting for nearly 50 per cent of all disbursements.
“In areas like the North Rift, South Rift, Mount Kenya, most households keep livestock. The vibrancy of cooperative movements there also contributes to the high loan uptake,” he said.
He urged defaulters to settle their debts to enable AFC to serve more farmers.
AFC is also expanding its services to arid and semi arid lands (ASALs), with a focus on inclusivity. Marsabit branch so far has over Sh200 million available for local farmers.
The corporation is also exploring the establishment of a branch in West Pokot to support livestock farmers and it is developing a Shariah-compliant loan product aimed at Muslim communities in ASAL regions.
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