With the agriculture sector having declined in 2019 and expected to decline further in 2020 due to locust invasions and the coronavirus pandemic, it will need all the help it can get. The National Treasury has offered the Agricultural Finance Corporation (AFC), the financier of the agriculture sector, Sh1.5b in the next three financial years.
The corporation is expected to use the funds to further its programs, including technical assistance to clients covering agriculture, food security, credit extension and rural development. Additionally, as part of its Women Affirmative Action Window, the corporation is seeking to promote credit to female-led enterprises, seeing that previously, only 5% of its lending went to women.
“Through the years, AFC has been loaning using ‘hard’ collateral in an effort to safeguard the taxpayers’ investment…This among other reasons has gravitated loaning largely to men with less than 5% of total loaning going to women through the years. This data has troubled AFC and it’s the basis upon the rethink of how better to include women in agricultural finance in Kenya,” says the agricultural sector financier.
To facilitate a successful credit deployment to women, the corporation is looking for partners to assist through financial concessional credit lines, guarantee mechanisms, risk-sharing facilities, innovation funds, grants for technical assistance and even grants for enabling environment and infrastructures like post-harvest handling at communal levels to generate confidence in warehouse receipts systems.
According to the National Treasury, in its programme-based budget to Parliament, it will give the monetary assistance in three instalments, the first Sh500 million will be given in FY2020/21 and the other FY2021/22 as well as FY2022/23.