A major challenge facing farmers especially the small-holders is the inability to access funds. For a farmer set on practicing agriculture it is a requirement to have necessary farm inputs. These require capital to acquire therefore, farmers are called upon to do extensive research before approaching a potential financier.
- Youth Enterprise Development Fund
The initiative was introduced by the government for the youth interested in investing in the agribusiness. There’s a loan product referred to as Agri-Vijana targeting this group. Loan offered to individuals and groups amounts to Kshs. 200,000 and attracts no interest. In addition, the loan comes with additional features such as a full greenhouse and other handy farm inputs. For more details check out www.youthfund.go.ke.
- Agricultural Financing Corporation(AFC)
It is an institution fully owned by the government to help farmers access funds for their farm projects. AFC has various loan products which are available to farmers. A farmer has many options to choose from and apply a specific product in accordance with their proposed projects. For more information visit your nearest regional office.
- Local Banks.
The banking sector has not been left out when it comes to offering loans to farmers. Several banks have taken interest in agriculture and supporting the small scale farmers in Kenya through financing projects to maximize profits in agribusiness. These include Co-op Bank which offers Maziwa loan and Mifugo loan a product of Equity Bank.
- Communal Saving Groups
Formation of savings groups in the society is a Kenyan culture. As a farmer joining a savings group in your locality could be beneficial. Most of these groups use the merry-go-round technique. In the process huge sums of money is collected which a member in need can be loaned to repay on a minimal interest. It is therefore a good avenue for a farmer to get funds for an intended project.
- Dairy Cooperative Societies
As a dairy farmer and a member of a certain dairy cooperative, it is possible to acquire a loan to initiate a profitable agricultural project. However, the amount of loan accessible is determined by the farmer’s milk production. The loan is repaid by delivering the milk produce to the cooperative society as a security.
For an individual intending to take up agribusiness and the challenge is finding a financial source to actualize their project, there are accessible institutions willing to provide funds. However, taking a loan has its benefits and demerits. Although, sources of funds are available and of importance to a farmer, acquiring the right information is helpful so as to approach the right institutions for financial assistance.