European Investment Bank (EIB) on Wednesday launched a 5.7 billion shillings (57 million U.S. dollars) program to help boost economic opportunities for thousands of smallholders across Kenya.
Catherine Collin, European Investment Bank regional representative for East Africa said the Kenya Agriculture Value Chain Facility will seek to transform long-term investments in agriculture in Africa.
“Working with Equity Bank across country, the new Kenya Agriculture Value Chain Facility will help agriculture companies to modernize and harness the full economic, employment and export potential of agriculture as well as expand business with local smallholders,” Collin said in Nairobi.
Under the new financing program, agricultural companies across Kenya will be able to access loans with maturities of up to seven years, longer than commonly available in the market.
This, the EIB said, is expected to help companies to expand, upgrade and modernize their equipment thereby improving productivity, and strengthening the integration of smallholders into the agricultural value chain.
Collin said the new initiative represents the first dedicated support for long-term investment by agriculture companies in Africa backed by the EIB designed to tackle specific investment gaps currently hindering expansion in the sector.
She said the EIB will strengthen its close cooperation with Kenyan partners to ensure that agricultural investment can increase under an exciting new scheme that acts as a model for EIB engagement across Africa.
Equity Bank is one of the key financial institutions supporting the agricultural sector in Kenya and is a leading provider of financial services to rural communities and smallholders.
Polycarp Igathe, Equity Bank Kenya Managing Director said the bank has aligned its strategy with Kenya’s development agenda to focus on growing the agribusiness portfolio through servicing all segments from retail, to SME to large enterprises and corporate banking customers.
He said the new agriculture financing initiative will address the gap of long-term funding in the sector identified as a key barrier to growth.
Agriculture which is the leading source of economic activity, employment and exports in Kenya contributes directly and indirectly to 51 percent of Kenyan GDP and accounts for 60 percent of jobs in the country, according to government statistics.