Kenya: AFC Hands Farmers Sh8 Billion Loans Repayment Reprieve

20 October 2020

The Agriculture Finance Corporation (AFC) plans to restructure most of its Sh8.7 billion loans to give farmers who have defaulted a chance to repay following difficulties that have been occasioned by the Covid-19 pandemic.

AFC chairman Franklin Bett said they are creating provisions to restructure the debt, which will be done on a case by case basis.

"We are creating provisions that could see AFC restructure most of its Sh8.7 billion loan book with farmers getting a moratorium on a case by case basis," he said.

Commercial banks have also been restructuring customer loans for those who were unable to pay due to the pandemic.

The Central Bank of Kenya (CBK) said last month that by the end of August, banks had restructured loans amounting to Sh1.12 trillion, equivalent to 38 per cent of the total banking sector loan book of Sh2.9 trillion.

Funding for women

The moratorium was a result of a harsh economic environment and limited cash flow in the economy occasioned by measures aimed at containing the spread of the coronavirus. Mr Bett said the move would help farmers to reduce the cost of agricultural production and increase yields.

Outgoing AFC managing director Lucas Meso said the agency had also created a platform to increase funds loaned to women as they play a critical role in food production.

The institution also launched the Women Affirmative Access Window programme to drive financial inclusion in agricultural finance.

He said this special window would open up funding for women and advance up to Sh1 billion to them in the next two years, without having a form of collateral.

"AFC aims to enhance access to agricultural finance by women across the value chains by increasing loans advanced to women to approximately Sh1.4 million per day or Sh1 billion in a calendar year," said Mr Meso.

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