Investing in agriculture, according to The World Bank, is one of the most effective ways to reduce hunger and poverty in Africa.
In Kenya, the Government estimates that approximately 80% of the population depends on agriculture as a primary source of livelihood. While the agriculture sector contributes more than 25% of KenyaÔÇÖs GDP, agricultural productivity is estimated to be 60 times lower than that of developed nations. This indicates tremendous opportunity for growth in the sector through increased efficiency and expanded scope and scale.
Equity Group Foundation (EGF) is working to bridge the opportunity gap for small and medium-sized farmers by helping them increase their production and business capacities, as well as their access to technology, credit, and markets ÔÇô all of which are key barriers to their participation in agricultural growth. Working with partners and leveraging Equity BankÔÇÖs commitment to banking the poor, our goal is to assist 2.5 million farmers increase their economic security through agriculture by 2018.
Building upon Equity Bank’s legacy of banking the low-income populations especially in the rural areas, EGF has been particularly concerned about the plight of smallholder farmers since our inception. In addition, we are increasing our targeting of medium-sized farmers as the sectorÔÇÖs important, yet often overlooked “missing middle”. Medium-sized farms are generally too large for microfinance and small-holder programmes, yet still too small to compete with commercial farms and even secure affordable working and investment capital. For both segments, EGF tailors approaches to achieve four overall objectives as shown in the illustration at right.
These themes are put into practice through several on-going programmes and partnerships. For example, in 2013, EGF launched the multi-year Unlocking Agricultural Potential project in partnership with the Royal Netherlands Embassy of Kenya. The three-year project aims to assist over 2,000 medium-size farms, each between 5-70 acres, to increase profitability and achieve sustained growth by:
- Increasing agriculture production and incomes through technical assistance;
- Reducing the risks of farming through irrigation and insurance products;
- Improving farm efficiency through management systems, technology, and training; and
- Increasing incomes through agriculture sales and marketing strategies.
EGF, together with Equity Bank, continues to support the implementation of the Kilimo Biashara (Farming as a Business) project, which launched in 2008 in partnership with Alliance for a Green Revolution in Africa (AGRA), International Fund for Agriculture Development (IFAD), and the Government of KenyaÔÇÖs Ministry of Agriculture.
The project works to enhance food security and increase overall household income of smallholder farmers and agro-dealers. To date, over 61,000 farmers have benefitted from EGFÔÇÖs financial literacy and business services training and technical assistance, and have used their learning to access approximately KSh 3.7 billion in credit.
EGF also currently implements the Partnership to Support Passion Fruit Farming with TechnoServe and Equity Bank. The project works to improve business practices among smallholder farmers in sweet yellow passion fruit farming in Meru, Embu, and Kirinyaga Counties. Still in its pilot phase, EGF has helped to identify and train 200 farmers in financial literacy and farm management, as well as build the local and regional value chain.
Since 2008, EGF has trained over 95,000 smallholder farmers on farm and business development and more than 215,000 smallholder farmers in accessing over Ksh 5.4 billion of credit to support expanded farm operations. In addition, Equity Bank has transformed the lives of nearly 500,000 smallholder farmers, lifting them from subsistence to commercial farming through inclusive financial intermediation.