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adding there is need for banks and SACCOs to increase loan
portfolio services in sustainable agriculture.
“This will increase opportunities for farmers and help them
produce more in cost-effective ways,” the CEO added.
Nyawade decried lack of investment by Banks and SACCOs in
the sector, noting change in policy in agriculture financing will
open new opportunities in the financial market.
Acknowledging food imports as a major risk to competitive
agricultural products in the Kenyan market, Nyawade said
sustainable financing in agriculture would mitigate poverty
levels.
MESPT Ag CEO Charles Nyawade According to the World Bank, the agriculture finance market
is constrained by inadequate or ineffective policies, high
transaction costs to reach remote rural populations, covariance
of production, market, and price risks, and absence of adequate
instruments to manage risks.
By Stephen Macharia The World Bank also cites “lack of expertise of financial
institutions in managing agricultural loan portfolios” as a
MESPT to SACCOs: drawback to robust financing options in agriculture.
There is need to
Nyawade added farmers in Kenya, a majority of whom live in
RE-THINK GREEN the rural areas, where poverty is prevalent, lack knowledge on
FINANCING how to access financing options.
portfolios
“MESPT is creating a nexus between farmers and financial
Existing policies governing agricultural financing in Kenya institutions. We are organizing forums bringing together farmers
do not match farm product cycles, exposing farmers to and the financial institutions. Since 2011, MESPT has directly
risks of loan default and consequent low credit rating served over 70,000 smallholder farmers in Kenya,” Nyawade
from financial institutions. explained.
This was said during a strategic green financing partnership The problems in the Kenyan agriculture sector are not limited
breakfast meeting for financial institutions, government to market and finance options. “Farmers, who are used to
officials and representatives of donor institutions held in rain-fed farming systems, are being pushed into dryer, more
Nairobi organized by Micro-Enterprise Program Support Trust marginal areas where they become increasingly vulnerable to
(MESPT), a development organization. drought and the unpredictability of weather patterns resulting
from climate change,” the Food and Agriculture Organization
Speaking to SACCO Star Magazine, MESPT Ag CEO Charles (FAO) notes.
Nyawade said “green financing remains unpopular among
financial institutions” and called on farmers to adopt new Agriculture is critical in Kenya’s economic growth. The sector
farming methods to improve productivity. contributes 33 per cent of the Gross Domestic Product (GDP)
and drives 65 per cent of export earnings.
“As MESPT, we are helping farmers access financing. We are
helping financial institutions develop agriculture and green Nyawade opines that farmer-friendly credit options have the
portfolios,” Nyawade said. potential to improve lives of over 70 per cent of Kenyans who
earn all or part of their income from agriculture.
He noted that the agriculture finance market accounts for
10 per cent of available capital in many lending institutions, He added MESPT has the technical capacity to advise credit
providers on agriculture financing, noting the organization’s
solutions predicated on sustainable agriculture.
“Our products are tailored towards all farmers including the
smallholder farmers. With the right support, smallholder farmers
can improve production and yield. This segment of farmers should
not be left out of funding portfolios,” he added.
MESPT also believes empowering farmers will directly
contribute to food security in the country.
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