The East African Development Bank (EADB) has entered into a financing agreement with the German Development Bank KfW for the ‘Agricultural Financing Kenya’ project which is funded by the German Government as part of the wider ‘One World – No Hunger’ special initiative.
The announcement was made at the EADB Head Offices in Kampala, Uganda by the bank’s Director General Vivienne Yeda.
‘Agricultural Financing Kenya’ will cater to the SMEs and farmers along the agricultural value chain in Kenya.
The project which will be funded by EUR 13 million consists of two components. The first component will provide medium- to long-term loans to small and medium sized farmers and SMEs along the agricultural value chain via selected partner financial institutions that have extensive market knowledge. The second component will be technical assistance and will involve training and capacity building measures.
Yeda noted that agriculture is the key source of income among Kenya’s rural population.
“Most of the farmers from rural Kenya are employed in small and medium enterprises (SMEs). This program will go a long way to improve food security for the communities while achieving the greater purpose of poverty eradication,” she said.
“It is our belief that the program will give agricultural SMEs in Kenya the opportunity to invest and therefore expand and grow. This will greatly improve agricultural productivity and efficiency in Kenya. Ultimately, a more efficient Kenyan agricultural sector should boost economic growth, generate employment creation, reduce poverty and increase food security,” Yeda remarked.
The ‘Agricultural Financing Kenya’ program follows the successful implementation of two similar collaborations between EADB and KfW in Uganda: the ‘Rural Finance Enhancement Program’ and the ‘Agricultural Enhancement Program’. The two programs follow a similar model and have delivered over EUR20 million in financing to SMEs in Ugandan rural areas and along Uganda’s agricultural value chain.