Govt to allocate Sh1bn to AFC to boost access to credit » Capital News
NAIROBI, Kenya, Jun 1 — The government has committed Sh1 billion to the Agricultural Finance Corporation (AFC) in the 2024/2025 financial year to boost farmers’ access to credit.
President Ruto, speaking during Madaraka Day Celebrations in Bungoma on Saturday, said the government is collaborating with Afriexim Bank(African Export-Import Bank)to provide Sh15 billion to AFC to support increased lending to farmers.
He said the Indian Exim Bank will also support AFC to enhance our agricultural mechanization agenda, providing farm inputs to farmers at low rates.
“The third critical strategic decision was to invest intensively in agriculture and food security, together with other pillars of BETA, in order to stimulate growth in the productivity of our farmlands and rural economies,” Ruto said.
“But having done so, it is necessary for us to enhance market access for our produce and products, locally, regionally, and beyond.”
AFC has an annual loan demand of Sh15 billion against its revolving fund of Sh4 billion per year resulting in a shortfall of Sh10 billion of unfinanced applications according to date provided by Government Spokesperson Isaac Mwaura.
“To mitigate this funding gap, President William Ruto, has directed that AFC be allocated the funds which will ensure that Kenyan farmers get access to affordable loans which are 7 percent cheaper than the commercial loans further having a positive impact on the economy by lowering the cost of living, creating more jobs and earning us foreign exchange through export of agricultural produce,” Mwaura explained in remarks on February 1.
AFC assists in the development of agriculture and agricultural industries by making loans to farmers, co-operative societies, incorporated group representatives, private companies, public bodies, local authorities and other persons engaging in agriculture or agricultural industries.
It remains the leading Government Credit institution mandated to provide credit for the sole purpose of developing agriculture.
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