The Alliance for a Green Revolution in Africa (AGRA) and the government have signed a Memorandum of Understanding to scale up access to agricultural financing.
The initiative dubbed Programme for Rural Outreach of Financial Innovations and Technologies (PROFIT) is a Sh2.9 billion six-year development program aimed at reducing poverty in rural areas.
It is expected to avail financing for smallholders farmers by scaling up an ongoing initiative, through which a risk sharing facility of Sh435 million was provided by AGRA, IFAD and the Government to Equity Bank involving 49,000 farmers in direct lending for farm inputs. Through the PROFIT initiative, IFAD and the Government will avail an additional $10 Million to be used in the form of risk sharing instruments. The money is expected to scale up financing by a number of Kenyan banks and Micro-Finance Institutions with the aim of leveraging close to $100 million of new credit financing mainly targeting smallholder farmers.
The programme targets smallholder farmers, pastoralists, artisans fishermen, women, landless labourers and youth, and is designed to have national coverage with special emphasis in rural areas of Kenya. "Innovating financing approach to agricultural an impact in Kenya by leveraging financing to small scale farmers, thereby lifting rural families out of poverty by helping them improve their production and by connecting them with new markets," said Jane Karuku, President of AGRA.
The core objectives of PROFIT are to increase incomes of the target groups as a result of improved production, productivity and marketing in the various rural enterprise sectors. "This program will avail affordable credit to small-holder farmers so that they can buy fertilizers and other inputs to improve farm productivity, enhance their food security and expand their income base. The initiative is therefore expected to make a major contribution towards efforts to eradicate absolute poverty and provide for national food security," said Joseph Kinyua, Permanent Secretary, and Ministry of Finance.