Nairobi:The Government has called for innovative financing models to expand irrigation, unlock affordable credit for smallholder farmers, and accelerate investment in Kenya’s agricultural sector.
According to Kenya News Agency, Principal Secretary for Irrigation, Ephantus Kimotho, emphasized that traditional collateral-based lending is insufficient for meeting the financing needs of smallholder farmers. He urged financial institutions to employ data, technology, and risk-sharing mechanisms to enhance the bankability of farmers.
Speaking in Nairobi at the Eastern and Southern Africa Private Sector Forum on Irrigation, Kimotho discussed the importance of integrating farmer, production, irrigation, transaction, and market data. This integration would enable lenders to assess farmers’ actual creditworthiness and develop financing products tailored to their needs.
Kimotho highlighted the existence of significant farmer data across government, financial institutions, mobile platforms, and private-sector technology providers. The challenge lies in connecting and responsibly utilizing this information to support better financing decisions. Linking farmer profiles with various records could strengthen credit scoring, allowing lenders to assess farmers based on repayment capacity rather than traditional collateral.
Digital platforms and farmer-facing applications were also noted for their potential to reduce information gaps, transaction costs, and risks associated with lending to smallholder farmers. Kimotho urged irrigation equipment suppliers and technology companies to engage early with the government, financiers, and farmers as preparations continue for the planned rollout of irrigation interventions in April 2027.
Additionally, Kimotho called on technology providers to conduct demand assessments to gauge farmers’ ability and willingness to pay for irrigation technologies while developing market incentives to improve uptake. He underscored the role of blended finance, guarantees, and other risk-sharing instruments in attracting private capital into irrigation, treating it as a productive investment that increases agricultural productivity and strengthens farmers’ resilience to climate change.
Kimotho warned that financing alone would not suffice, stressing the necessity of technical support, appropriate technologies, reliable markets, and secure offtake arrangements to ensure farmers generate sufficient returns to service their financing. He advocated for a simplified financing architecture to efficiently channel concessional funds, guarantees, and other risk-sharing mechanisms to farmers and irrigation projects.
The Government plans to continue collaborating with development partners and the private sector to mobilize capital, strengthen risk-sharing mechanisms, and scale up productive irrigation finance. This initiative aims to expand irrigated agriculture, boost food security, and improve the livelihoods of smallholder farmers.
The session included key players in agricultural finance and technology, featuring a panel comprising Erastus Njoroge of Kenya Development Corporation, Raphael Kuria of YAPU Solutions Kenya, Anne Njeru of Safaricom DigiFarm, and Madleine Mwithiga of ADAPTA Earth.
