Financial inclusion for smallholder farmers

With a 15.5 million US dollar grant from the MasterCard Foundation, the Alliance for a Green Revolution in Africa (AGRA) is implementing the Financial Inclusion for Smallholder Farmers in Africa Project (FISPAS). It is to provide farmers in Ghana, Kenya and Tanzania access to improved financial and non-financial services, partially using digital channels to improve efficiency and reduce risk associated with financial transactions related to input purchase or output marketing.
 
The farmers will access the services through a mobile-based technology dubbed KCB Mobigro, a banking system that enables them to access credit while deliberately linking them to other players across the agricultural value chains from inputs to markets, thereby boosting their creditworthiness. Africa’s Kenya Commercial Bank (KCB) bank group is the first partner of FISFAP and benefits from a 320,000 US dollar grant for technical assistance and training needed to develop the Mobigro platform.
 
"AGRA aims to catalyse a major shift in Africa's agriculture through innovation-driven, sustainable productivity increases and access to finance that improves the lives of smallholder farmers,” says AGRA President Agnes Kalibata. “With the support of the MasterCard Foundation and our partner KCB, our innovative financing model is unlocking millions of dollars’ worth of credit for smallholder farmers and small agricultural businesses previously considered too risky for lending, giving them unprecedented opportunities to invest in growth.”
 
The partnership is to see KCB develop and implement value chain finance solutions where dairy and maize farmers will get access to services such as savings, insurance and credit for input and storage of their produce using their mobile phones and existing relationships with buyers and agro dealers. Within three years, KCB hopes to have reached five million farmers with savings, insurance or credit services to be delivered through its proprietary agricultural ecosystem platform.
 
Through the programme, which starts in Kenya, KCB intends to reach farmers across the region in a funding arrangement that will be based on crop cycles, with an insurance facility embodied in the KCB Mobigro platform.
 
According to the KCB Bank Group, its mobile banking proposition has so far registered close to five million customers. More than 120 million US dollars has been disbursed in micro and mobile loans.
 

AGRA is an African-led alliance that aims to advance uniquely African solutions to sustainably raise farmers’ productivity and connect them to a growing marketplace. Together with its partners – including researchers, donors, African governments, the private sector, and civil society – AGRA seeks to create an environment where Africa feeds itself. AGRA works across 18 countries in sub-Saharan Africa.
KCB Bank Group was established in 1896 in Kenya. Over the years, the Bank has grown and spread its wings into Tanzania, South Sudan, Uganda, Rwanda and Burundi, completing the East African circuit in the year 2012. Today, KCB Bank Group has a network of 242 branches in the region. 

More Information

AGRA website

(AGRA/sri)