KCB a player in the sector

More than 70 per cent of Kenya’s 41 million citizens rely on agriculture directly making the sector the largest employer in the economy.

Indeed, agriculture contributes 24 per cent of the Gross Domestic Product (GDP) directly and 27 pc indirectly through linkages with manufacturing, distribution and other service related sectors.

Approximately 45 pc of Government revenue is derived from agriculture and the sector contributes over 75 pc of industrial raw materials and more than 50 pc of the export earnings.

Due to these high indicators the Government has continued to give agriculture a high priority to promote national development.

Given the important role that the agricultural sector plays in the economy, the Kenya Commercial Bank has come up with a sector-specific tailored approach.

The bank established a specialised agribusiness unit whose primary goal is to reach out to players in the sector.

The unit is now four years old and continues to make progress in achieving the national Agricultural Sector Development Strategy (ASDS) aimed at transforming the sector into a profitable economic activity capable of attracting private investment and providing gainful employment for the people.

The ASDS strategy is expected to achieve the 10 pc annual economic growth rate expected under the economic pillar of the Vision 2030 and KCB has aligned itself to be a key enabler in this sector.

In order to be fully supportive of the sector, KCB offers accounts and loan facilities designed for small, medium and large scale farmers.

A key entry point for the farmers is a tailored account dubbed ‘‘Farmers Account’’ which is offered at the over 175 KCB branches countrywide.

The affordable account enables farmers to save proceeds of their hard work and is offered with access to a Visa enabled debit card, Mobile & internet banking.

Noting that majority of the farmers are small scale and tend to shy off opening an account, a key product that has been well received is the KCB M-Benki account that enables all holders to earn interest, apply for a loan or transfer money directly to the bank account and much more on their mobile phone.

COST OF TRANSACTIONS

Loading this account is also free at all Mtaani agents while money transfer has been very fairly priced making the cost of transactions well within the reach of all account holders.

This technological breakthrough will enable farmers undertake banking wherever they are with ease. Key to this vital sector is the growing need for experts who will guide farmers as they seek to grow their produce.

At KCB we have aggressively approached this need by hiring Agribusiness banking experts who have hands-on experience and a broader view of specialised sector requirements.

For example we have dairy bankers in and around Central and Great Rift whose sole mandate is to support and offer advisory services on matters business, legal and finance in the dairy sector.

The same scenario is replicated in tea, cereals and sugar with the intent of offering advisory services and a personalized approach to banking.

A growing need within the players in the agricultural sector is ease of access to loans and working capital to help drive farm output.

KCB has developed collaborative sector specific loan products that ensure that farmers have access to the monies and tools required to unlock their agri-business potential based on their seasonal farming and specialized equipment needs.

Under the dairy sector, KCB offers loans that enable farmers to attain better breeds of dairy cows and dairy processing equipment such as on the farm mini milk chilling equipment, milking machinery, heavy and light duty vehicles etc.

For tea farmers KCB offers a loan of up to 80pc of the value of the tea delivered to credited tea factories.

This has been a welcome change to the farmers who would have to wait till the tea bonus season in order to get their hard earned money.

In the cane sector, KCB has partnered with cane millers and is now able to offer working capital financing for farmers with cane exceeding 10 months who are in need of capital to manage the harvesting.

KCB also offers cane advances for farmers who have delivered the cane to the factories and are awaiting payment but require the advance faster than the factories payout.

A lot more is in the pipeline in regards to beef, poultry, horticulture, aquaculture, cereals etc as it is the bank’s intent to comprehensively cover the sector.

Other than the sector specific financing KCB offers Asset Based Finance which enables farmers acquire movable assets, farming machinery, office furniture and a wide array of trade and working capital solutions not only for in country trading but also international export of produce. To date, KCB has lent over Sh600 million to the farmers.

Partnerships have been a key business driver for KCB as the bank supports the Agricultural sector. A collaboration between KCB and USAID has been key in enabling farmers access funding to run their business.

Partnerships with processors and millers have also been beneficial in driving financial assistance to the grassroots.

REHABILITATING FORESTS

The bank has partnered with several companies such as Githunguri Dairy, Brookside Dairy, KTDA, Mumias Sugar, Kwale Sugar etc. to empower farmers by providing them with sector specific education during open days and workshops.

Through such initiatives, the bank not only drives awareness of products offering but also enlightens farmers with knowledge on how to effectively run a business in areas such as accounting & project management.

The KCB Foundation has also been a critical partner in this sector supporting numerous initiatives like bee keeping and fish farming for the communities in and around the Mau Likia forest where the Foundation is rehabilitating 530 hectares of Forest land to its former glory.

The Foundation has also built Sand Dams in Kibwezi which has enabled groups like the Thange self-help group to take up vegetable farming in the once almost arid, drought prone areas in Ukambani.

Other initiatives include setting up a banana plantation in Murang’a, soya processing plant in Kakamega, drip irrigation for Lokwaliwa fruit farm in Turkana and in Matinyani, a vocational training institute for farmers amongst other notable programmes.

These initiatives exist in an effort to transform the agricultural livelihood for millions of Kenyans to create sustainable, income generating programmes that communities collaboratively inspire, drive and grow.

CLICK HERE to find us here today and let’s chat. Mrs Angela Mwirigi is KCB’s Director, Marketing & Communication.