Equity has unveiled a tailor made financing programme for small scale farmers in the country that seeks to increase productivity and profitability of cereals production.
The bank has been implementing a farm inputs subsidy programme dubbed Kenya Cereal Enhancement Programme – Climate-Resilient Agricultural Livelihoods Window (KCEP-CRAL).
The scheme is being implemented in partnership with the Government of Kenya, the European Union, and the International Fund for Agricultural Development (IFAD).
The programme will ensuring that targeted smallholder farmers access farm inputs, value chain financing, linkage to markets, post-harvest management and investments in interventions that build resilience to climate change and sustainable natural resources management.
Equity Group Managing Director and CEO Dr James Mwangi notes that Equity’s role as an implementing partner aligns with the bank’s core values of creativity and innovation.
The bank has invested heavily in interventions in agriculture and continues to engage with partners to improve the lives and livelihoods of all players on the entire agriculture value chain.
Through the programme, Equity has so far disbursed Ksh1.65 billion to 71,073 farmers to enable them to purchase farm inputs. What’s different about these loans is that they are tied to wallets that can only be redeemed at one of the 364 pre-qualified agro-dealer outlets.
For instance, if a farmer took a loan of Ksh 20,000, that money will be deposited into their e-wallets and they have specific limits that they can spend on different kinds of inputs.
The loans are insured, thereby protecting farmers from losses they may incur due to poor harvests resulting from unforeseen occurrences like drought, too much rainfall or pest infestations.
In addition to financing, the farmers benefit from financial literacy training and agricultural extension services where the progress of their farms are monitored and appropriate technical advice given by agricultural officers.
The bank initially operated a debit card-based, electronic platform (e-voucher) since the year 2016 but as a response to the Covid-19 pandemic, it developed and deployed a mobile banking-based e-voucher system dubbed KCEP-CRAL Plus.
The contactless solution has been an innovative model to curb the spread of the novel corona virus.
Equity offers additional training on financial education and entrepreneurship to the farmers and agro-dealers. Farmers get to appreciate the need to plan their yield for consumption at home, and how much to sell to raise cash, or how much to store.
Agro-dealers are equipped with better entrepreneurship and financial management skills that help them scale their businesses.
This agribusiness approach to farming facilitates income generation for re-investment in agriculture and ensures they have a sustainable income. This training and exposure to financial systems also allow financially excluded farmers to enjoy the benefits of banking.
“In the long-term, farmers have the opportunity to approach financial institutions, have their land assessed and access credit facilities. This ensures they have sustainable farms that can self-finance on their merit,” says Moses Abukari, IFAD Regional Programme Manager.
The programme is currently being implemented in five counties in Western Kenya and interested farmers can visit their nearest Equity Bank branches for more information or sign up.