State financier taps on devolved governments with cheaper credit

By Sammy Cheboi

Agricultural Finance Corporation (AFC) has unveiled an ambitious plan to open branches in 47 counties to tap on opportunities in the devolved governments.

The corporation hopes to ride on its low interest rates regime of 10 per cent per annum and a vibrant credit delivery system of existing 42 outlets  countrywide  with further plans to commission new branches.

AFC opened six branches in Lamu (Mpeketoni), Tharaka-Nithi (Chogoria), Elgeyo-Marakwet (Iten), Uasin Gishu (Ziwa), Homa Bay (Oyugis), and Siaya (Bondo) counties, this year.

The new branches are expected to avail credit to individuals and enterprises engaged in agricultural activities such as irrigated agriculture for food crops and horticultural production, and small business enterprises involved in the supply of farm inputs and veterinary drugs (Agrovets).

Lucas Meso, AFC Managing Director, says the recent opening of the six branches is testimony to the corporation’s expansion policy aimed at reaching all Kenyans, thereby enabling farmers to benefit from financial services available to the agricultural sector.

“Our target is to have a strong retail presence. We plan to expand our footprint to cover all the 47 counties in the foreseeable future,” Mr Meso said, in an Interview with The Standard On Sunday.

He says the extension of the branch network is a result of the growing customer numbers, which has necessitated the need to avail service delivery channels closer to locations where such customers can access credit services.

“I’m very pleased with the progress so far. We are on track to achieve the goals we set ourselves and have the momentum to push forward,” he notes.

More credit

AFC Chairman  Hezbon Mariwa said branch network expansion is expected to increase the beneficiaries of agricultural credit served by the Corporation from 35,000 clients in 2009 to at least 150,000 clients by 2013. He estimates that each financial year, the corporation has an unmet loan demand of about Sh10 billion.

The corporation, wholly owned by Government has an annual revolving fund of Sh2.2 billion. In the 2012/2013 financial year, AFC received a shot in the arm following a Sh700 million grant from the Government.

The funding arose out of the Ababu Namwamba-led Parliamentary Select Committee on Cost of Living, which successfully brought a Motion before the House in November last year.  

The House also called for  more funding from Government to enable AFC carry out debt restructuring in the counties.

Opening the Chogoria Branch, Agriculture Minister, Sally Kosgei, advised farmers to take advantage of available credit through AFC branches and undertake to repay their loans so that other farmers could benefit from the same.