KCB Group and Mastercard Foundation Announce Agricultural Finance Program to Benefit Two Million Farmers
The US$30 million effort will offer financial inclusion to two million farmers in Kenya and Rwanda
Nairobi, Kenya, August 2016 — KCB Group and Mastercard Foundation have entered into a US$30 million (Kshs.3 billion) partnership to promote financial inclusion for at least two million smallholder farmers in Kenya and Rwanda. In addition, KCB Group will extend at least US$200 million (Kshs.20 billion) to farmers in the two countries in affordable loans over the next five years.
The partners have each set aside US$15 million for a total of US$30 million (Kshs.3 billion). The program will provide critical funding for smallholder farmers and pastoralists in the largely unbanked agricultural sector in the two countries.
KCB Group said in addition to its US$15 million (Ksh1.5 billion), it will spend $200 million (Kshs.20 billion) in credit to farmers under the program dubbed KCB MobiGro, highlighting its commitment towards supporting the agriculture sector in the region.
The program aims to reach farmers, 60 percent of whom are women, in the dairy, livestock and food sub-sectors in the two countries.
“We are reimagining and redefining the agricultural sector with a view of transforming agribusiness by accelerating financial services access,” said KCB Group CEO and Managing Director Kenya Joshua Oigara. “We believe that technology supported agribusiness is an emerging and fast growing frontier that will embolden the agricultural sector to be a stronger driver of economic expansion in the East African region.”
Mastercard Foundation sees the partnership as a game-changing initiative that utilizes technology to deliver solutions capable of lifting millions of households from poverty.
“The Mastercard Foundation is excited to be partnering with KCB to extend mobile-based financial services to some of the most excluded rural populations of Kenya and Rwanda,” said Ann Miles, Director of Financial Inclusion and Youth Livelihoods at the Foundation. “This partnership will help us understand to what extent access to mobile-based financial services and agricultural information can help smallholder farmers and pastoralists achieve higher productivity and returns, thus providing them with a pathway out of poverty.”
KCB MobiGro will include provision of a mobile phone-based technology solution, known as M-Kulima that will enable small scale farmers to access financial services such as credit, insurance and savings through their mobile phones. The platform will also be used for information sharing on crop and livestock management, pricing, market trends, and linkages to value chain actors.
The US$30 million (Kshs3 billion) will be spent on mobilizing and training of smallholder and pastoralist farmers on financial literacy and business management to improve on production and stock management, extending mobile financial services to smallholder farmers, research and facilitating cross learning between producer organizations. Farmers will also be exposed to market opportunities for their produce under the project.
Farmers will be eligible to register either individually or through organized farmers’ associations and access vital information on produce markets, production improvement and agricultural and entrepreneurship training sessions.
Besides KCB Group’s business arm delivering the financial services, the KCB Foundation — its corporate responsibility vehicle — will be incorporated in a shared value approach to deliver social interventions aimed at the farmer, pastoralists, and agri-enterprises, amongst other value chain actors.
According to Mr. Oigara, while agriculture is the most significant economic sector in East Africa — contributing 30 percent to the Kenyan GDP and employing over 60 percent of the population — only three percent of loans in the banking sector are channelled into agribusiness.
“At the same time, the majority of farmers operate on a small scale basis owing to limited access to finance, quality inputs and produce markets. We are taking a holistic approach to ensure farmers are equipped with all the essential resources required to enhance their livelihoods,” said Mr. Oigara.
Small scale farmers in Kenya cultivate on farms less than two acres in size using limited technology. These small farms, operated by roughly three million farming families, account for 75 percent of total agricultural production in Kenya, making them the main driver of the economy.
As the largest commercial bank in the East African region and with 120 years’ experience, KCB Group has been at the centre of driving the growth of the agricultural sector, making deliberate investments to commercialize the sector and elevate it into a top driver of economic expansion.
About KCB Group
KCB Bank Group is East Africa’s largest commercial Bank that was established in 1896 in Kenya. Over the years, the Bank has grown and spread its wings into Tanzania, South Sudan, Uganda, Rwanda, Burundi and Ethiopia (Representative office). Today KCB Bank Group has the largest branch network in the region with over 250 branches, 962 ATMs and 12,000 agents offering banking services on a 24/7 basis in East Africa. This is complemented by mobile and internet banking services with a 24hour contact center services for our customers to get in touch with the Bank. The Bank has a wide network of correspondent relationships totaling over 200 banks across the globe and our customers are assured of a seamless facilitation of their international trade requirements wherever they are.
About the Mastercard Foundation
MasterCard Foundation works with visionary organizations to provide greater access to education, skills training and financial services for people living in poverty, primarily in Africa. As one of the largest, private foundations, its work is guided by its mission to advance learning and promote financial inclusion to create an inclusive and equitable world. Based in Toronto, Canada, its independence was established by Mastercard when the Foundation was created in 2006. For more information and to sign up for the Foundation’s newsletter, please visit www.mastercardfdn.org. Follow the Foundation at @MastercardFdn on Twitter.
For further information, please contact:
Judith Sidi Odhiambo
Head of Corporate & Regulatory Affairs
Senior Manager, Communications
The MasterCard Foundation