Banking in Kenya

Published on: 14:20PM Nov 12, 2012

This morning we visited banking and banking cooperatives for farmers in Kenya. The most common money lending group in Kenya is called a Sacco (Savings And Credit Cooperative). In Kenya there are 30,000 Saccos, who work with banks such as the Cooperative Bank to offer lower interest rate loans to farmers. The Sacco movement in Kenya is billed as the largest in Africa and among the top 10 globally.

Saccos can provide farmers with loans for land, inputs and expenses, including school expenses, at a lower interest rate of about 6%. Bankers see farming in agriculture as high risk, and loan at a rate of up to 24% interest (more typical is 19%). Also, to encourage savings for farmers, savings rates through Saccos are often low, even zero percent. Today, Saccos hold 20% of the nation's savings.

We also visited the offices of the Kenyan Federation of Agricultural Producers (KENFAP) and talked to those who represent the smallholders in Kenya. They view the top challenges for Kenyan agriculture as:

  1. Most products sold are in raw form. The country needs more value-added processing.
  2. National ag potential is not realized. There are 540,000 hectares and only using 115,000 hectares of products.
  3. Cost of inputs is too high and quality is low.
  4. Market access. Kenyan farmers need a clear and organized market system.

In the evening we visited the Dutch Embassy to learn more about development in agriculture from other countries. Stay tuned for more about the possibilities in Africa!

women farmers


View a photo gallery of my travels.