The Alliance for a Green Revolution in Africa (AGRA) has entered into a partnership with KCB Group to facilitate the implementation of a platform that enables smallholder farmers across the East African region access credit and training.
With a 15.5 million dollar (USD) grant from the MasterCard Foundation, AGRA is implementing a project called FISFAP (Financial Inclusion for Smallholder Farmers in Africa Project) where farmers in Ghana, Kenya and Tanzania will be getting access to improved financial and non-financial services using digital channels to improve efficiency and reduce risk associated with financial transactions.
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.
The partnership will 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 3 years, KCB hopes to have reached 5 million farmers with savings, insurance or credit services to be delivered through its proprietary agricultural ecosystem platform.
”Financing continues to be one of the biggest hurdles to the realization of an African economic transformation through agriculture. As AGRA, we are committed to playing our part in de-risking agriculture through innovative approaches like FISFAP”, said AGRA President, Dr. Agnes Kalibata during the signing ceremony in Nairobi.
“AGRA aims to catalyze a major shift in Africa’s agriculture through innovation-driven, sustainable productivity increases and access to finance that improves the lives of smallholder farmers. 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,” added Dr. Kalibata.
Through the program that starts in Kenya, KCB hopes to use its wide network to reach farmers across the region in a funding arrangement that will be arranged based on crop cycles with an insurance facility embodied in the KCB Mobigro platform.
Speaking during the signing of the agreement, KCB Chief Business Officer & MD Kenya Samuel Makome, said the deal is in line with the bank’s sustainability agenda focusing on financial inclusion, responsible lending and community investment.
“The project will see the Bank contribute to economic growth by increasing the productive capacity of the economy as well as creating jobs in the marginalized areas. The roll-out of an Enterprise Development Initiative dubbed “Mifugo Ni Mali,” which seeks to improve value chains for livestock farmers in Arid and Semi-Arid Lands is one of the initiatives under this stable. As we look forward towards rolling this project in the subsidiaries, we believe that a partner like AGRA will come in handy to give us the necessary impetus to make the programme even more impactful”, Makome said.
Mr. Makome added that the bank’s long term agenda is underpinned by the need to promote financial inclusion by offering appropriate and affordable products to the unbanked population which still has no access to mainstream form of banking.
KCB’s mobile banking proposition have so far registered close to 5 million customers. More than US$120 million has been disbursed in micro and mobile loans.
AGRA’s mission is to catalyse an agricultural transformation in Africa through innovation driven, sustainable productivity increases and access to finance that improves the lives of smallholder farmers.