KWFT supporting agribusiness value chains

KWFT Managing Director, Mr Mwangi Githaiga. PHOTO | LEOPOLD OBI | NATION MEDIA GROUP

What you need to know:

  • We have a number of innovative and agriproducts which address the needs of smallholder farmers. First we have a network of about 241 branches spread out across the country. 80 per cent of our clients are based in the rural areas whose mainstay is agriculture.
  • The bank also finances the Insurance Premiums to make it more affordable to the clients as they pay the same in easy monthly installments.
  • Banks generally shy away from financing anybody who is in small-scale because most of them do not have products targeting that market. That level of financing is driven by other factors that are beyond just making profits.
  • The bio-slurry which is a by-product is used as farm manure while the gas is used for cooking thus eliminating the use of wood fuel. That is how we look at our products.

KENYA WOMEN MICROFINANCE BANK (KWFT) prides itself as the micro-lender of choice. KWFT Managing Director, Mr Mwangi Githaiga spoke to LEOPOLD OBI on access to finances for smallholder farmers.

What products do you have for smallholder farmers or agriprenuers?

We have a number of innovative and agriproducts which address the needs of smallholder farmers. First we have a network of about 241 branches spread out across the country. 80 per cent of our clients are based in the rural areas whose mainstay is agriculture.

Our products look at the entire agricultural value chain from production financing, input financing-where we finance agro dealers-, processing/value addition to financing market linkages.

We finance farmers to engage in agribusiness ventures and KWFT encourages them to adopt modern ways of farming and use of technology to ensure efficiency and higher production through the following products;

1. Greenhouse farming. Most of our customers have small farms so we provide them with greenhouses loans to enable them overcome challenges such as unpredictable rainfall and climate change which has made farming less profitable. By investing in greenhouses farmers can produce enough for their own consumption and for the market while managing inputs and production.

2 .Dairy farming. We realised that most of our customers keep traditional cows which are less productive. For this reason, we have partnered with the Ministry of Agriculture so that our clients get trained on best practices on how to manage high breed cows which are highly productive. We make sure the farmer can access the cow when it is at least six months in-calf. The farmer also gets a grace period before repaying the loan after the cow calves down. The package also incorporates insurance policy to cover the farmer from risks such as death of the cow.

3. Aquaculture. There are many areas in this country where people would like to consume fish but there isn’t enough and there are also some areas where women get exploited as they go buying fish to take to the market. This package aims to address these challenges. We have partnered with the Ministry of Agriculture, Livestock and Fisheries who train our farmers on fish farming using fish ponds then we finance the whole process from fish pond construction, purchasing of fingerlings and buying of fish feeds.

4. Bee keeping. We have partnered with companies that are able to produce modern hives. We provide the finances to clients to purchase the beehives and harvesting gear to encourage production, harvesting, and processing of quality honey.

5. Other Products: We also finance farmers interested in dairy goat and poultry keeping as well as financing to acquire agri assets. Our finances are not limited to smallholder farmers though.

Do you only provide insurance on dairy farming?

Our insurance covers look at all areas; crop farming, dairy farming, farm equipment and so on. Actually, we have an Insurance Agency within our Bank. The insurance agency advises farmers on risk covers to go for depending on what they are doing.

The bank also finances the Insurance Premiums to make it more affordable to the clients as they pay the same in easy monthly installments.

What are the criteria for accessing loans at KWFT?

It depends on the kind of customers we are talking about. Farmers who have no collateral are put into groups so that they can co-guarantee each other, we don’t go for hard security in this case.

As the farmers grow, they will have assets which can be used to guarantee their loans in the future.

How does KWFT provide loans to the youth who have no collateral?

We have what is known as social-guarantees where the youth who have no collateral can be guaranteed by their parents or friends. We also train them alongside older people who are in agribusiness, encouraging them to regard them as their mentors.

Why do most financial institutions shy away from lending money to smallholder farmers?

Banks generally shy away from financing anybody who is in small-scale because most of them do not have products targeting that market. That level of financing is driven by other factors that are beyond just making profits.

As a Microfinance Bank, we are driven by what we call a triple bottom line where we look at profitability at the institution level, social impact at the farmer’s level and planet at the environmental level.

If you finance a farmer to get a dairy cow, the cow will give her milk and money. We can also finance the farmers to put up a biogas plant which utilises the cow dung.

The bio-slurry which is a by-product is used as farm manure while the gas is used for cooking thus eliminating the use of wood fuel. That is how we look at our products.

Does KWFT offer Financial Management Training?

We train our clients for free on financial management. If a group comes to us, we train them for eight weeks before they are given loans. We give them financial education regularly on handling finances, group dynamics, making right investments, how to maintain business records etc.