Family Bank and DigiFarm have entered a financing agreement to provide digital credit for inputs and insurance to over 1,000 smallholder maize farmers in Embu County.
The partnership aims to boost agricultural production by offering farmers access to funds through the Safaricom-owned agri-tech platform, Digifarm.
The financing will be based on the size of the farmers’ land and crop cycle, with a focus on promoting farming resilience and increasing yields. In addition to financial support, the farmers will also receive training on sustainable agricultural practices, market linkage, and financial literacy. This initiative is particularly important for counties like Embu, which often face low agricultural produce due to production shocks such as droughts and diseases.
The production volume of maize in Kenya declined by 6.5% to 34.3 million bags in 2022, according to the Kenya Bureau of National Statistics. Farmers continue to struggle with a lack of access to funding for essential farming products, despite their vulnerability to climate change and market inefficiencies.
However, partnerships and technology adoption are helping to increase financial inclusion for smallholder farmers, according to Aristarichus Kuria, Family Bank Lead Digital Transformation. The bank focuses on providing end-to-end value to customers, and believes that this partnership will improve farmers’ financial resilience and reduce costs through technology, ultimately improving profitability.
Registered farmers will be able to redeem their credit vouchers for farm inputs from DigiFarm partner, Agrovet, in the company.
Digifarm, through technology and partnerships, aims to reduce the financing gap for smallholder farmers and promote climate resilient solutions. Their platform offers a range of services, including agronomy advice, credit for inputs, insurance, and connections with buyers during harvest.
Seema Gohil, Director of Digifarm, emphasized their commitment to transforming the agriculture sector through technology. Family Bank and DigiFarm will also extend their partnership to sorghum farmers in Meru County.
This collaboration follows a program led by the International Food Policy Research Institute, which aims to assess whether innovative insurance products can increase access to finance for smallholder farmers.