CS Mutahi Kagwe to Development Partners: Use Saccos to Give Farmers Single-Digit Loans

Agriculture Cabinet Secretary Mutahi Kagwe has challenged development partners and financial institutions to rethink agricultural financing by placing Kenya’s cooperative movement at the heart of efforts to unlock affordable credit for farmers and young agripreneurs.

Speaking during a stocktake meeting with the The African Development Bank Group and the Ministry’s project leadership, CS Kagwe insisted that financing models must reflect Kenya’s unique agricultural ecosystem, where SACCOs have demonstrated their capacity to mobilise savings, extend affordable credit and sustain agricultural enterprises.

“Why are we ignoring the biggest asset in financing in this country that we can use? SACCOs,” posed the CS, warning that lending to farmers at anything above single digit interest rates would undermine the very purpose of agricultural financing.

“Anything that is not a single digit interest rate is a waste of time,” he declared.

African Development Bank agriculture projects in Kenya

The meeting reviewed progress under three AfDB-supported interventions: the KSh. 5.4 billion Building Resilience for Food and Nutrition Security (BREFONS) Programme, the newly secured USD 20 million Building Resilience for Food and Livelihoods (BREFOL) grant, and the USD 36.3 million Empowering Novel Business led Employment (ENABLE Youth) Programme.

Under ENABLE Youth, KSh 2.2 billion has been earmarked for on lending in the next phase, with SACCOs expected to serve as the primary financing channel. The framework also incorporates participating financial institutions, with a binding commitment to unlock an additional KSh. 60B for youth and women through risk sharing arrangements.

CS Kagwe called for a financing approach that moves beyond simply disbursing loans to identifying viable enterprises and supporting their expansion, drawing lessons from the NYOTA Programme, whose model prioritises scaling businesses that young people have already established.

“It’s a demand for business, not a demand for money,” he emphasised, urging the Ministries of Agriculture and Cooperatives to work together with SACCOs to identify bankable agricultural ventures and accelerate access to affordable financing.

How many farmers are benefiting from BREFONS?

On implementation, BREFONS is already benefiting one million people against a target of 1.9 million across seven ASAL counties: Baringo, Garissa, Isiolo, Marsabit, Samburu, Turkana and West Pokot.

Its investments target water infrastructure, livestock productivity, market access, climate resilience and local value addition.

Meanwhile, ENABLE Youth has rehabilitated and equipped eight Youth Agripreneurship Incubation Centres, recruited and incubated 1,500 young people and supported 1,000 in developing bankable business plans.

The CS challenged the project teams to accelerate implementation with speed, innovation, prudence, accountability and sound corporate governance, while leveraging Kenya’s established cooperative heritage to deliver lasting impact.