Nairobi — Kenya's agriculture sector risks being left behind unless financing gaps are urgently addressed, experts have warned, cautioning that underfunding could undermine the country's long-term economic goals and limit its competitiveness in global agricultural markets.
Despite contributing more than 25 per cent of GDP and employing millions, agriculture receives less than five percent of total bank lending, even as Kenya spends around Sh250 billion annually on food imports.
Across Africa, farmers face a $65 billion financing gap, highlighting chronic under-investment, according to the Alliance for a Green Revolution in Africa (AGRA).
"Agri-financing in Kenya sits at about four percent, compared to agriculture's 22 per cent contribution to GDP. That gap must close," said Simon Kinuthia, Head of Agribusiness at Absa Bank Kenya.
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He added that Absa aims to progressively scale lending to match agriculture's economic weight, targeting over 20 percent.
The forum, held in Nairobi under the Global G.A.P TourStop, highlighted a "missing middle" in financing, where loans are too risky for commercial banks yet too large for microfinance institutions.
In such cases, lenders demand collateral of up to 120 percent of the loan value, effectively shutting out most smallholder farmers.
Women-led agribusinesses face even higher barriers. Antoinette Tesha, Investment Director at Trade Catalyst Africa, said her organization is addressing the gap through a climate finance facility supported by Mastercard Foundation and Trade and Development Bank.
Fintech firms are also reshaping agri-finance.
"Agribusinesses need speed and agility. Cash flow is king. We finance based on transactions, not just balance sheets," said Nancy Kinyanjui, Managing Director at Avenews, which extends credit based on trade data and customer orders rather than title deeds.
Experts cautioned that financing alone would not be enough. Challenges including transport, cold chain logistics, certification, and cross-border standards continue to constrain sector growth. Technology, including AI-driven scoring and digital wallets, was highlighted as a key tool for faster and more transparent loan processing.
With smallholder farmers producing nearly 70 percent of the nation's food yet remaining underfinanced, experts stress that bridging the financing gap is critical to securing Kenya's position in global agricultural markets.
