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Stakeholders have moved to address severe food insecurity in Kenya and mitigate inflation on food items, by mobilising various sector players, to reassess funding options and investments in the agricultural sector to bolster Kenya’s resilience in agricultural enterprises.

Targeted are financial institutions, agribusiness stakeholders, and government.

Available data shows that despite its substantial contribution to gross domestic product (GDP), the agricultural sector’s loans and investments portfolios are disproportionately low compared to its share of contribution to the economy.

Household survey

Formal borrowing for agriculture, as per the Financial Access Household Survey 2019, is utilised by only around 3.2 per cent of Kenyans.

In response, Ministry of Agriculture and Rootooba, a food and feed-based platform, have announced the two-day Financing Agriculture Sustainably Conference (FINAS2024), scheduled for March 27 and 28, 2024.

This gap in formal financing has led to the proliferation of informal mechanisms, which lack the capacity, quality, and quantity to meet the sector’s needs. Alternative income sources, social networks, and asset sales have provided sub-optimal solutions for raising the necessary capital for sector investment.

Mary Mwiti, CEO of the Council of Governors, emphasised the crucial role of counties in collaborating and devising solutions to establish credit and financing policies that empower farmers.

Paul Rono, Principal Secretary of the State Department of Agriculture, stressed the importance of investing in transforming Kenya’s vast and fertile land into a productive agricultural ecosystem, benefiting both farmers and the economy. Kawira Mutegi, Conference Director, highlighted that FINAS 2024 will convene stakeholders to deliberate on financing the sector through appropriate models.

The conference will include discussions on designing financing solutions tailored to a wide range of beneficiaries and de-risking approaches, such as blended financing.