Nairobi: Smallholder farmers are set to benefit from improved access to cold storage facilities following the signing of a Memorandum of Understanding (MOU) between the Agricultural Finance Corporation (AFC) and DanChurchAid (DCA) aimed at reducing post-harvest losses and expanding agricultural financing.
According to Kenya News Agency, the partnership, unveiled during a side event at the Financing Agri-food Systems (FINAS) Summit, will see AFC provide financing to farmer cooperatives to invest in cold storage infrastructure. This move is intended to enable farmers to preserve produce, reduce losses, and sell when market prices are favorable.
The initiative marks a significant milestone in AFC’s shift towards wholesale lending, a financing model that channels credit through cooperatives, Savings and Credit Cooperative Societies (SACCOs), and microfinance institutions instead of lending directly to individual farmers. Speaking after the signing, AFC Managing Director George Kubai said the partnership would initially target cooperatives in Nakuru and Nyandarua before being rolled out to other counties based on the success of the pilot phase.
He said inadequate storage facilities have for years forced farmers, particularly potato growers in Nyandarua, to sell their produce immediately after harvest at low prices, resulting in huge post-harvest losses and reduced incomes. ‘The partnership is about helping farmers maximize the value of their produce by providing access to infrastructure that preserves quality, extends shelf life, and allows them to sell when market prices are favourable,’ Kubai said.
He noted that the improved returns would strengthen farmers’ financial capacity, enhance loan repayment, and create a more sustainable agricultural financing ecosystem. Kubai said the initiative also complements AFC’s wholesale lending credit model, which is replacing conventional collateral requirements with social collateral by extending bulk credit to cooperatives and other anchor institutions.
Under the arrangement, cooperatives access financing from AFC and, in turn, lend to their members, enabling farmers without traditional collateral to obtain affordable credit. ‘This model allows us to reach farmers who have traditionally been excluded from formal financial services. Through cooperatives, we are driving financial inclusion while sharing risks across agricultural value chains,’ he said.
DanChurchAid Kenya Country Director Karen Poore said the organization has, with support from the Danish government, been implementing the Loss to Value (LTV) project to help farmer cooperatives adopt cold storage technologies that minimize food losses and improve incomes. She said while the technology has demonstrated significant benefits, its widespread adoption has been constrained by limited access to affordable financing.
‘The partnership with AFC provides the sustainable financial model needed for cooperatives to invest in cold storage facilities. We hope to see the programme expand beyond Nakuru and Nyandarua so that many more farmers can benefit,’ she said.
AFC Board Chairman Engineer John Mruttu described agriculture as the backbone of Kenya’s economy, saying the corporation remains committed to financing farmers and agribusinesses while promoting financial inclusion. He said AFC’s mandate extends beyond providing credit to ensuring that farmers who have traditionally lacked access to capital are brought into the formal financial system, in line with the government’s Bottom-Up Economic Transformation Agenda.
Mruttu said strengthening access to affordable agricultural finance is critical to enhancing food security, creating employment, and supporting economic growth. The AFC-DanChurchAid partnership is expected to provide a scalable financing model that combines affordable credit with modern storage infrastructure, helping smallholder farmers reduce losses, increase profitability, and improve their resilience while accelerating financial inclusion across Kenya’s agricultural value chains.
