USAID, an American development agency, has signed Sh940m loan portfolio guarantee agreement with Musoni Microfinance, a Nairobi based credit micro-lender.
The agreement will allow the microfinance to develop and roll out innovative financial loan products to increase access to credit within Kenya’s agricultural sector, especially within cereals, dairy, livestock and horticulture value chains. The group to benefit from this include individuals, associations, small-scale farmers, cooperatives and micro, small and medium enterprises.
According to Stanley Munyao, Musoni Microfinance Chief Executive, this facility will help them to provide smallholder farmers with quality inputs, market linkages, infrastructure and other auxiliary services.
On the other hand, Brook Adam, USAID Kenya and East Africa Investment team lead, believes that this agreement will assist Kenya, through agriculture, on its self-reliance journey. “The agreement we are launching today is one of the many ways that the US government partners with the private sector through agriculture in order to assist Kenya on its journey to self-reliance,” he said.
The portfolio is also expected to help the micro-lender to scale its digital lending in order to boost agriculture financing, increase food security and improve the livelihoods of small-scale farmers in the country. In fact, the agreement will increase lending approaches for marginalized small-holder farmers and agricultural micro-enterprises.
“Under its Kilimo Booster product, Musoni has been able to expand into rural areas and offer tailored products to small-holder farmers through a lean operational set-up and an innovative credit scoring model,” said Munyao.
Musoni Microfinance has now also increased its target to farmers and growers in three additional counties to 20 from its reach