The need for investing in agriculture is increasing due to a rising Kenyan population. However, Capital still remains as the problem when it comes to starting any business. However, our farmers need to know that there are institutions out there that are ready to finance their agricultural businesses.
Here are some of the financial Institutions that Provide Loans to Farmers in Kenya.
1. Kenya Livestock Finance Trust
Kenya Livestock Finance Trust (K-Lift) is a microfinance institution that offer credit to farmers and businesses in the livestock sector in Kenya. They off up to a maximum of Ksh. 1.2 million upon payment of Ksh. 250 application fee , completing a business proposal and presenting collateral or securities. The following groups are eligible for a KLIFT loan:
2. Equity Bank
Equity Bank supports all categories of farming activities through the provision of farming inputs and equipments at affordable interest rates. Although requirements in terms of security and payments are flexible it is only available to account holders. There are various products with varying lending amounts and repayment periods depending on the farmers needs. Some of the products are:-
-Farm Inputs Loan
This is a short term loan ranging from Kshs.1,000 to Kshs.100,000 paid within 1 year.
This loan is given in amount exceeding Kshs. 100,000 and repaid within 36 months.
There three types in this category where the amount ranges from Kshs.1, 000 to 100,000 for Kilimo biashara small scale payable in one year, amounts above Kshs. 100,000 for Kilimo biashara large scale paid in 3 years and loan amount depending on individual requirements and the ability to repay for Kilimo Biashara Agribusiness.
The loan amount in this category ranges Kshs 5,000 to 500,000from payable within one year. This facility is intended for micro enterprises dealing in livestock and cash crop production and to agricultural traders and agro-processors. Interested farmers need not have a remittance account.
The loan which ranges from Kshs 5,000 to 500,000 is paid within 24 months. Interested farmers must have an account to qualify for this facility. This is meant for small and medium scale farmers who want to invest in farm developments such as building of farm houses, farming expansion, purchase of livestock and farm fixed assets.
The loan amount is over Kshs. 30,000 paid in 24 months and intended for acquiring farm machinery, tools and equipment such as water pumps, drip irrigation kits and greenhouses.
3. Family Bank
To qualify for a loan you must have an account with Family Bank. The Dairy Products loan facility is designed for dairy farming. Other conditions are that the farmer must make milk deliveries to known milk processors. The amount of milk delivered determines the amount of loan a farmer can get. Up to Kshs. 100,000 can be advanced without securities and no guarantees are required. This loan is paid within one year
4. Agricultural Finance Corporation
AFC provides loans to individuals or groups carrying out agricultural activities. They have branches in most parts of the country. In livestock they finance dairy and beef production, sheep and goat production, bee keeping, piggery, poultry and fish production. These loans are repaid in periods between 2 and 5 years. To qualify for the loans farmers must provide securities and present a suitable and viable project proposal.
5. Faulu Kenya
Faulu Kenya has a product called Ufugaji Bora specifically meant for livestock farmers. Farmers can use this loan to purchase dairy cows, animal feeds and expand dairy farming. They also offer training to livestock farmers.
6. Kenya Women Finance Trust
The Kenya Women Finance Trust has a livestock loan product especially designed for rural women. Women who are interested in dairy farming can access this credit facility to start or improve dairy farming. Animals are identified by the women and inspected for health by a veterinary personnel and KWT team. If the animal is cleared it is insured by Jubilee Insurance, and KWFT pays for the cow.
Other aspects of livestock financing covered by KWFT are purchasing goats and acquisition of biogas digesters.
7. Brookside Dairy Ltd
Brookside Dairy supply farm inputs and animal feeds on credit to dairy farmers. They have a loan facility which is lent to farmers through Kenya Commercial Bank.
8. KCB Bank
KCB offers Dairy Installment Loan which targets individual farmers and Cooperative in need of working capital and acquisition of dairy herd. The loan is available to both new and existing KCB clients who are engaged in dairy production. Their Loans are between Kes.50,000 to Kes. 5M except for dairy bulkers and transporters whom they can financing up to 20M.
9. Juhudi Kilimo
Juhudi Kilimo provides microfinance loan products that allow Kenyan smallholder farmers to access high-quality agricultural assets that enhance the productivity of their farms.
10. Co-operative Bank of Kenya
They provide Maziwa Loan.It’s a product that targets women entrepreneurs with existing legal businesses who are seeking working and investment capital.
Repayment period of Maziwa Loan
• 5,000 to 300,000 – 12 months
• 300,000 to 1,000,000 – 18 months
• Above 1,000,000 – 36 months Age Limit Minimum 18 years and maximum of 75 years.