Why lenders are shunning agri-based small enterprises

Bananas going to waste at a stall in Muthurwa market, Nairobi. [Denish Ochieng, Standard]

Lenders have termed Small and Medium Enterprises (SMEs) in the agricultural sector risky, which explains the low credit advanced to the market segment.

The report, which interviewed 24 lenders, also found that most loans to SMEs in the country are borrowed by the informal value chain part of the agricultural sector.

The report by Aceli Africa, a financing intermediary that provides incentives for lending to SMEs, describes informal value chains as those involving crops like maize, rice and livestock.