Published on August 26, 2009

Agricultural value chain financing in Kenya: Assessment of potential opportunities for growth


The systematic and prudent financing of smallholder agriculture has been and continues to be a difficult goal in Kenya in spite of remarkable progress in the microfinance over the past twenty years. Agriculture, with its non-uniform cash flows, rural bias, poorly capitalised and widely dispersed producers, seasonal cash flows, price and market risks differs substantially from businesses conventionally supported by traditional finance and microfinance. Nonetheless, the majority of Kenyans are smallholder agricultural producers and fisher-folk and the well being of themselves, the food security of the nation and the development of Kenya’s national income depend on their continued and improved performance. What is required is a rigorous, analysis based approach to identify and service financing opportunities on the basis of minimum risk and maximum return.

Unfortunately, in spite of the existence data, a quality synthesis had never been undertaken with respect to financing opportunities. Thus, before undertaking research into value chains beyond dairy, KARF and FSD opted to sponsor a desk review of all materials deemed valuable for twelve commodities including: beef, dairy, eggs, feeds, fish, fruits, maize, poultry, rice, vegetables, water and wheat. Based on the previous work on dairy, INSPIRED was engaged to undertake this desk review.

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