Kagwe Wants SACCOs to Lead KSh2.2 Billion Youth Agribusiness Financing
Agriculture Cabinet Secretary Mutahi Kagwe has called for Savings and Credit Cooperative Organisations (SACCOs) to take the lead in financing young agripreneurs, insisting that agricultural loans should attract single-digit interest rates.
Kagwe said Kenya’s cooperative movement remains one of the country’s biggest financial assets and should be prioritised in efforts to expand access to affordable credit for farmers and youth-led agricultural businesses.
Speaking during a progress review meeting with the African Development Bank (AfDB) and the Ministry’s project leadership, the CS questioned why SACCOs were being overlooked despite their established capacity to mobilise savings and provide affordable financing.
“Why are we ignoring the biggest asset in financing in this country that we can use? SACCOs,” he posed.
He warned that lending to farmers at interest rates above single digits would undermine the objective of making agricultural financing accessible.
“Anything that is not a single digit interest rate is a waste of time,” Kagwe declared.
Under the AfDB-supported Empowering Novel Business-led Employment (ENABLE Youth) Programme, KSh2.2 billion has been earmarked for on-lending in the next phase, with SACCOs expected to serve as the primary financing channel.
The financing framework will also involve participating financial institutions, with a commitment to mobilise an additional KSh60 billion for youth and women through risk-sharing arrangements.
Kagwe urged the Ministries of Agriculture and Cooperatives to work together with SACCOs to identify viable agribusiness ventures and ensure young people access financing to expand their businesses.
He emphasised that the focus should shift from simply disbursing loans to identifying existing enterprises with growth potential and helping them scale up.
“It’s a demand for business, not a demand for money,” he said, citing the NYOTA Programme as an example of a model that prioritises supporting and expanding businesses already established by young people.
The meeting also reviewed progress under two other AfDB-supported interventions: the KSh5.4 billion Building Resilience for Food and Nutrition Security (BREFONS) Programme and the newly secured USD20 million Building Resilience for Food and Livelihoods (BREFOL) grant.
BREFONS is currently benefiting one million people against a target of 1.9 million across seven Arid and Semi-Arid Lands (ASAL) counties: Baringo, Garissa, Isiolo, Marsabit, Samburu, Turkana and West Pokot.
The programme focuses on improving 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.
Kagwe challenged the project teams to accelerate implementation while upholding accountability, prudent financial management, innovation and sound corporate governance.
The meeting brought together AfDB representatives, the Agricultural Finance Corporation (AFC), ministry project coordinators and other technical officials to assess progress and strengthen implementation of the programmes.
