The Treasry will inject Sh1.5 billion to the Agricultural Finance Corporation (AFC) which is a government entity that offers Loan Products to Farmers all over Kenya as a “strategic investment in a public enterprise”
The money which will trickle in for the next three years is expected to further the AFCs programmes, including credit extension and technical assistance to clients covering agriculture, rural development and food security.
“The amount of capital injected and absorbed into the strategic State-owned entities (AFC) [is targeted at] at Sh500 million for 2020/21, Sh500 million for 2021/22 and Sh500 million for 2022/23,” said the Treasury in the Programme-Based Budget released to Parliament late last week.
AFC has been struggling to get patners to aid in increasing the funding of its clients, especially women in agribusiness through concessional credit, risk-sharing, grants and technical assistance.
“To facilitate a successful deployment [of loans to women], the corporation is looking for partners, to assist through financial concessional credit lines, guarantee mechanisms, risk-sharing facilities, innovation funds, grants for technical assistance and even grants for enabling environment and infrastructures like post-harvest handling at communal levels to generate confidence in warehouse receipts systems. This could benefit many smallholder farmers most of who are women,” says the AFC.
The Treasury has set the target for the year starting July as Sh500 million and another Sh1 billion in the next two years.
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