NAIROBI, Kenya’s Ministry of Agriculture, Livestock and Fisheries has signed an agreement for a 300 million shillings (2,89 million US dollars) packarge with Equity Bank (Kenya) Limited to support farmers under the second phase of the Agricultural Credit Guarantee Scheme (ACGS).
The signing of the AGCS Phase II agreement marks the 3rd time that the Ministry is partnering with Equity Bank in this effort, with the first being in 2008 through the Kilimo Biashara Partnership and the second in 2011 through the ACGS Phase 1 agreement. the ACGS aims to scale up and magnify lessons learnt throughout the previous years of implementation.
The partnership is a risk-sharing arrangement where the government provides a guarantee fund to cushion the Participating Financial Institutions (PFIs) for any proven credit loss of the outstanding credit amount in default. In addition to credit, Participating Financial Institutions (PFIs) offer farmers other services such as capacity building, savings/deposits and linkage to crop insurance and markets.
The initiative, under the Public-Private Partnership (PPP) framework, will facilitate access to affordable financial services for smallholder farmers, thus spurring commercialization of farming in a sector which has been plagued by low production, poor marketing, low financial literacy and misconception.
Speaking during Thursday’s signing ceremony, Agriculture, Livestock and Fisheries Cabinet Secretary (Minister) Willy Bett said: This signing ceremony clearly symbolizes the strengthening of the Public Private Partnership between private organizations and the Government. Our partnership with Equity Bank will help accelerate efficient and effective service delivery to low income beneficiaries in the agricultural sector thus bringing them into the formal financial system.
Equity Bank Chief Executive Officer Dr. James Mwangi said the total amount of loans disbursed by the end of 2016 came to more than 7.0 billion shillings and had benefited 472,632 farmers since 2008.
Source: NAM NEWS NETWORK