Kenya Commercial Bank (KCB) has launched MobiGrow, a product that will give millions of smallholder farmers in Kenya and Rwanda access to affordable loans and training.
Mobile-based MobiGrow was rolled out in partnership with the Mastercard Foundation. It is targeting more than 2 million farmers in the two East African countries in the next five years.
KCB’s Retail Director Annastacia Kimtai says, “We are leveraging technology to tackle challenges faced by farmers when it comes to credit access and inclusion. We are also empowering farmers with non-financial solutions such as capacity building forums to grow their agribusinesses.”
MobiGrow is specially tailored to enhance financial inclusion and improve the livelihoods of smallholder farmers including women and youth. The innovation will also link the farmers to other actors across the agricultural value chain from inputs to markets.
Already, MobiGrow is working with over 200,000 farmers across Kenya. The farmers have received agribusiness training and taken up loans to boost their crop and dairy farming. It is also working with pastoralists across the Arid and Semi-Arid Land (ASAL) regions.
To include everyone, the innovation does not require smartphones or complicated app downloads since those interested can access MobiGrow by dialling USSD code *225#. This will enable them to open an account, request for a loan or sign up for farmer training.
MobiGrow is part of ongoing efforts by the bank aimed at strengthening the agricultural value-chain. The bank aims at providing innovative funding schemes and technical advisory services to smallholder farmers across the country.
Enhancing access to suitable financial products and services, to particularly smallholder farmers, is key in promoting agricultural value chains and ensuring higher value agricultural products.
“Agribusiness holds the key to sustainable economic development. We are committed to supporting agricultural value chains for greater inclusion of small producers to improve their competitiveness and achieve the sector’s high potential for jobs and value creation” said Kimtai.
KCB has committed spending at least Sh35 billion over the next five years in lending to the agriculture sector, a major driver of East Africa’s economy.
This increased funding will eventually comprise five per cent of the bank’s loan book, in addition to the over Sh14 billion already extended to the agriculture sector.
The bank says itis committed to supporting agriculture in the East African region and its goal of increasing financial inclusion evidenced by programmes such as Mifugo ni Mali, an initiative of the KCB Foundation.
Mifugo ni Mali seeks to establish a value chain development programme that has so far reached 30,000 livestock herders, beekeepers and fishermen in Kenya.
MobiGrow is keen on working with previously established farmer engagement forums as it has so far signed MoUs with 146 Farmer Producer Organizations (FPOs) who work with smallholder farmers.
On July 3 and 4, MobiGrow signed MoUs with ACK Malindi Church which has a pool of 80,000 farmers and Kenya Bixa Company in Ukunda, an off-taker working with over 6,000 smallholder farmers across the South Coast region.
“Financial technology is rapidly changing how financial services are delivered. We will work with smallholder farmers to ease their access to mobile-based credit at the best rates in the market,” said Kimtai.
The proposition is part of KCB’s investment towards supporting the Kenya government’s Big Four Agenda by bolstering food security through innovation.
In addition, the bank recently unveiled sorghum and soybean value input financing under the Farm to Market Alliance (FtMA) programme.
Under this programme, KCB will provide input financing to farmers in Nyanza and Western Kenya. Apart from poultry value chain financing, the bank has also entered into strategic partnerships with Syngenta and Technoserve under the Mavuno Zaidi programme to support tomato and potato farmers to access financing, agronomical support, and market linkages.
Agriculture contributes 26% to the Kenyan economy and 20% of employment. The sector controls over 75% of the labour force and 50% of revenue from exports. In addition, rural economies are supported by the sector which plays a vital role in creating livelihoods.