EastAfrican Development Bank (EADB) has signed a funding agreement with KfW, a German state-owned development bank, to finance Kenya’s small farmers under the ‘Agricultural Financing Kenya’ project. The project is funded by the German government as part of the wider ‘One World – No Hunger’ initiative, Vivienne Yeda, the director general of EADB, said in a statement.
Yeda said the 13 million euros project consists of two components and will focus on agriculture sector’s small and medium enterprises (SMEs) and farmers along the value chain in Kenya.
“The first component will provide medium to long-term loans to small and medium sized farmers and SMEs along the agricultural value chain. This will be done through selected partner financial institutions, while the second component will be technical assistance and will involve training and capacity building,” Yeda said at the deal signing in Kampala. She noted that agriculture is the key source of income among Kenya’s rural population.
“Most rural farmers in Kenya operate as SMEs. Therefore, this programme will go a long way in helping improve food security for the communities while achieving the greater purpose of poverty eradication,” she said. She added that the project will give agricultural SMEs in the country an opportunity to invest, expand and become sustainable.
“This will greatly improve agricultural productivity and efficiency in Kenya. Ultimately, a more efficient agricultural sector will boost economic growth, create new jobs, reduce poverty and increase food security,” Yeda said.
The ‘Agricultural Financing Kenya’ programme follows the successful implementation of two similar collaborations between EADB and KfW in Uganda; the ‘Rural Finance Enhancement Programme’ and the ‘Agricultural Enhancement Programme’.
The two programmes follow a similar model and have delivered over 20 million euros in financing to SMEs in rural Uganda and the country’s agricultural value chain, according to the statement.