BY ELIZABETH KYALO
Microlending plays a crucial role in Kenya’s agribusiness sector, particularly for smallholder farmers and micro-entrepreneurs who are perceived as high risk by mainstream lenders.
It provides access to finance for inputs, equipment, and working capital, enabling them to increase productivity, expand their businesses, and improve livelihoods. This is vital as agriculture is a key contributor to Kenya’s economy and offers significant employment opportunities, especially for youth.
Despite agriculture accounting for 34 per cent of the economy, generating about one out of 10 formal jobs, the sector receives minimal funding. Data from the Central Bank of Kenya (CBK) Supervision Report for 2023 shows that it received Sh134.2 billion in credit out of the Sh3.8 trillion extended to the private sector, accounting for just 3.53 percent of the total private sector credit.
Yet, agriculture doesn’t just feed people, it is also one of the most powerful tools to end extreme poverty and boost economies.
According to World Bank, growth in agriculture remains 2-3 times more effective at reducing poverty, than an equivalent amount of growth generated in other sectors, and the effects are largest for the poorest in society.
However, lack of investment and incentives are preventing countries from capitalizing on its full potential. In addition, conflict, extreme weather events and economic shocks are slowing down efforts to feed10 billion people by 2050and putting millions at risk of falling into extreme poverty.
Today, over two billion people are facing moderate or severe food insecurity, and many more are unable to afford a healthy diet.
Nevertheless, recent innovations in agricultural finance have created renewed interest in the sector. Such innovations include value chain sector. Such innovations include value chain
finance approaches involving traders and processors, warehouse receipt finance, agricultural insurance, microfinance, just to name a few.
The above example is evidence that financing the sector by providing funds for purchasing quality fertilisers, seeds, pesticides, feeds and other inputs can have a palpable effect on lives and livelihoods.
Over the years, the banking regulator in Kenya has approved diverse loan products by micro lenders towards agribusiness. The positive impact has been phenomenal.
The latest Agriculture Sector Survey Report by CBK highlights an improvement in access to credit for the sector, attributing this in part to digital lending, which effectively reaches businesses in the agricultural value chain in remote areas lacking brick-and-mortar bank or sacco branches.
Micro finance institutions are using technology-driven insights to enable them better lend to players in the agricultural value chain in better ways than traditional lenders, which even the banking regulator recognises. Platinum Credit Kenya has been at the forefront of this transformation through innovative agribusiness product line tailored to the realities of smallholder farmers.
For instance, the Maziwa Product, which offers loans to dairy farmers providing them with at least two cows. Recognizing that milk offers consistent monthly income, the loan is structured to ensure repayments can be made without disrupting the farmer’s cash flow.
Farmers across the country can access up to Sh1,0300,000 within 24 hours via this micro dairy financing product
The firm also offers Tea-Maziwa and Potato Product which bundles multiple income streams; dairy with tea, and potatoes as well to to dairy farmers thus providing a financing model that’s responsive to local ecosystems.
Farmers eligible for the Potato Product, for example, must be existing Maziwa clients with at least one acre of arable land. In partnership with seed providers Fresh Crop and Kisima, the company supplies high-yielding varieties – Shangi, Unica, and Sherekea alongside fertilizer and soil treatments.
Through well analyzed field-based insights, Platinum Credit recognizes that inputs alone cannot guarantee success. For this reason, it has deployed agronomists, trained professionals who offer hands-on guidance in land preparation, crop rotation, pest control, and harvesting. They ensure farmers not only borrow wisely but also farm scientifically.
By focusing on integrated solutions that combine access to financing with inputs, training, and technical support, Platinum Credit is not only de-risking agricultural lending, but reimagining what rural banking can achieve.
Case in point is the story of Shadrack Kiprotich Biwott , a dairy and potato farmer from Uasin Gishu County (Straw back Branch), who recently harvested a record 164 bags of potatoes from just one acre of land. With guidance from agronomists and access to clean, certified seed varieties like Shadrack turned a modest plot into a thriving agribusiness, generating over Ksh 338,477 in profit. His story isn’t just a personal success; but a case study of how inclusive, well-structured agri-financing can ignite economic growth and food security across Kenya.
Under the tea-maziwa and potato product, the number of registered farmers have doubled each season, with close to 1000 farmers being targeted this planting season by Platinum Credit. The Kenyan government must therefore continue developing more robust policies that promotes microcredit for poor farmers because it has proven to be the surest way to enable farmers lift themselves out of poverty in line with the United Nations Sustainable Development Goal Number 1
