Millions of smallholder farmers in Kenya and Rwanda are set for a major lift after KCB Bank launched a product that will give them access to affordable loans and training.
Dubbed MobiGrow, the product rolled out in partnership with the Mastercard Foundation is a mobile-based innovation looking to reach more than two million farmers in the two East African countries in the next five years.
MobiGrow is specially tailored to enhance financial inclusion and improve the livelihoods of smallholder farmers including women and youth, while making deliberate efforts to link them to other actors across the agricultural value chain from inputs to markets, said KCB Bank Director Retail, Annastacia Kimtai.
MobiGrow is already working with over 200,000 farmers across Kenya who have received agribusiness training and taken up loans to boost their crop and dairy farm productivity. MobiGrow is also working with pastoralists across the Arid and Semi-Arid Land (ASAL) regions.
“We are leveraging technology to tackle the challenges faced by farmers when it comes to credit access and inclusion. We are also empowering farmers with non-financial solutions such as capacity building forums to grow their agribusinesses,” said Mrs Kimtai.
Farmers can access MobiGrow by dialing USSD code *225# to open an account, request for a loan or sign up for farmer training.
MobiGrow is part of ongoing efforts by the Bank aimed at strengthening agricultural value-chain by providing innovative funding schemes and technical advisory services to smallholder farmers across the country. Enhancing access to suitable financial products and services to farmers – particularly smallholders – is key in promoting agricultural value chains and ensuring higher value agricultural products, KCB said. “Agribusiness holds the key to sustainable economic development. We are committed to supporting agricultural value chains for greater inclusion of small producers to improve their competitiveness and achieve the sector’s high potential for jobs and value creation” said Mrs Kimtai.
KCB has committed spending at least Sh35 billion over the next five years in lending to the agriculture sector, a major driver of the East Africa’s economy.
This increased funding will eventually comprise five per cent of the bank’s loan book, an addition to the over KShs.14 billion already extended to the agriculture sector.
The bank’s said it was committed to supporting agriculture in the East African region and its goal of increasing financial inclusion evidenced by programs such as Mifugo ni Mali, an initiative of the KCB Foundation. This program seeks to establish a value chain development programme that has so far reached 30,000 livestock herders, beekeepers and fishermen in Kenya.
MobiGrow is keen on working with previously established farmer engagement forums as it has so far signed MoUs with 146 Farmer Producer Organizations (FPOs) who work with smallholder farmers. On July 3rd and 4th, MobiGrow signed MoUs with ACK Malindi Church which has a pool of 80,000 farmers and Kenya Bixa Company in Ukunda, an off-taker working with over 6,000 smallholder farmers across the South Coast region.
“Financial technology is rapidly changing how financial services are delivered. We will work with smallholder farmers to ease their access to mobile-based credit at the best rates in the market,” said Mrs Kimtai.
The proposition is part of KCB’s investment towards supporting the Kenya government’s Big Four Agenda by bolstering food security through innovation.
In addition, the bank recently unveiled sorghum and soybean value input financing under the Farm to Market Alliance (FtMA) program. Under this program, KCB will provide input financing to farmers in Nyanza and Western Kenya. Apart from poultry value chain financing, the bank has also entered into strategic partnerships with Sygenta and Technoserve under the Mavuno Zaidi programme to support tomato and potatoes farmers to access financing, agronomical support, and market linkages.
Agriculture is the most dominant economic sector in Kenya, contributing 26% to the economy, 20% to employment, and over 75% of the labour force and 50% of revenue from exports. In addition, the sector continues to play a vital role in the rural economy.