Farmers a step away from owning greenhouses on loan

Farmers and youth who have traditionally been locked out of modern farming due to financial constraints can now breathe easy after a partnership between Amiran and Rafiki Deposit taking Microfinance, a subsidiary of Chase Bank inked a deal, meant at providing credit finance on farm inputs like greenhouse and drip kits to foster the deepening and adoption of the modern farming techniques in the country.

According to Yariv Kedar, the deputy Managing Director of Amiran, although a considerable number of Kenyans have been enlightened of the benefits and the means of carrying out modern farming techniques, many have been left out from the adoption of these modern farming techniques due to largely lack of finance to purchase them.  “It is behind Amiran love for a full transformation process that we have sought out on likeminded financial institution like Chase bank to help empower Kenyan Youths and farmers at large.

We have had awareness programs and have travelled throughout the country but realized that after the skills and knowledge transfer, many of our target population needed an extra aid in terms of finance.” Under this program, the financial institutions will disburse loans of as low as Sh14, 500 for the purchase of Amiran’s Foundation Kit for starter farmers,  and youth going up to Sh272, 000 for the standard Amiran Farmers Kit (AFK) and millions of shillings for purchase of Amiran innovations for large scale farmers.

Chase Bank Deputy Executive Officer Paul Njaga noted that the program is in line with the bank’s goal of empowering smallholder farmers in the country. “Agribusiness is one of our major focuses in the coming financial year and as result we have set aside about Sh3.5billion to foster it in the country.” Chase bank will mainly finance large scale farmers and the credit finance on the input will have varying interest rates depending on the clientele needs but with a range of 18-21 percent.

Rafiki DTM loans will be focused on the small scale farmers and the youth. This will spearhead efforts to decrease youth unemployment and support small scale farmers to turn from subsistence agriculture done for survival into wealth creation farming through the Amiran way of smart agribusiness. According to RAFIKI DTM Chief Executive Officer Daniel Mavindu, their institution has set aside about Sh300 million for the program which will be offered at a varying interest rate depending on the needs of the client ranging 15-20 percent. “We understand the plight of the youth and most small scale farmers in the country as most of them are regarded as high risk clients because of their lack of viable collateral in credit finance.

We are therefore not going to demand for the conventional collateral and the rate of access and finance will be dealt with on a case by case approach,” added Mavindu. We have improvised collateral conditions and made the whole process flexible to enable the success of the program. For instance, the youths and smallholder farmers with no viable collateral will only be needed to provide relative guarantors or even assurances from the parents and guardians that they will till the land for a specific period of time.

The beneficiaries of the program will be given a specific grace period before the onset of the payment period. “These are farm inputs and we have put it into consideration that the farmers who will acquire the farm inputs are given a grace period that corresponds with the period that the crops they are dealing take to mature and be harvested. You only expect a farmer to start paying back the loan after selling the produce,” explained Mavindu. After successful agreements with financial institutions, farmers will then proceed to Amiran which hand them their farm input they have applied for with prerequisite knowledge on how to make returns using the technology.

In order to ensure the success of the initiative, the three parties have made it open to even non members of the two financial institutions. Mavindu noted, “This is open to any farmer irrespective of whether you are an account holder with Chase or Rafiki. All interested farmers and the youths only need to register with the institutions and meet the set requirements.” According to him, the cooperative agreement by the three institutions to disburse cheaper and flexible loans to farmers and the youth is the right step to empowering our country to economic growth. “Agriculture holds an important key to poverty reduction through increased productivity, value addition, improved technologies and linkages to other sectors.”

With the lending programmes, Chase Bank, Amiran Kenya and Rafiki DTM will all focus on equipping farmers to produce more quality produce enough to feed the country while also attracting international markets in a move to further open up Kenyans agricultural export industry. Njaga applauded the initiative and was very optimistic about its positive impact in the society. “The survival of Kenya’s agriculture rests squarely on the youth who are the farmers and leaders of tomorrow.

Two-thirds of Kenyans depend directly on agriculture for their livelihoods In addition to ensuring food security; agriculture plays a vital role in supporting our economy and generating employment which is a greater step to realization of Vision 2030. Our youth continue to struggle to find jobs, yet there are emerging opportunities they can tap into, particularly in the agricultural sector that can help them to be self-reliance and more enterprising. Failure for our youth to exploit and grab the opportunities we are continuously providing to them such as these, not only shuts down a key economic window to national development, but predisposes society to social and economic instability.”

Mr. Njaga added that the Bank’s partnership with Amiran Kenya and Rafiki DTM will signal the significance of developing the agricultural sector and create more opportunities for farmers and the youth. He noted that the Bank’s move to offer competitive and flexible financing is in tandem with Chase Bank’s commitment to reach out to the SME sector and more so the youth sector who are increasingly involved in agri-business. With 80 per cent of the entrepreneurs in the country being in agri-business addressing this sub-sector will significantly boost SMEs.

Amiran Kenya will play the part of installing equipment, training the farmers both practically and theoretically on Amiran products, offer advice and carry out farm visits through Amiran’s professional and experienced agronomists to ensure that farmers attain the best possible harvest, allowing them to clear off their loans calmly and at the expected time frame.

“Agriculture is the backbone of Kenya’s economy and new investment in form of finance is essential for creating new jobs and economic growth. Amiran is pleased to have partnered with like-minded organizations like Chase Bank and Rafiki DTM as part of our broader engagement to support all levels of farmers on one angle and special attention to the youth as another angle, as we empower them to be the leaders of now.

This new lending initiatives further supports the use of modern farming techniques that work to conserve the country’s natural resources, contribute to more young people venturing into agribusiness as well as, improve quality of farmers produce by the use of Amiran’s modern and field proven technologies.” said Pinhas Moskovich, Amiran Kenya Managing Director.