Farmers in Kenya are increasingly turning back to digital lenders for short-term credit, reversing a recent trend that had seen many rely on family and friends, the Central Bank of Kenya (CBK) said in its March survey.
The survey shows that 35 per cent of farmers accessed digital loans in March 2026, up from 26 per cent in January, signalling renewed uptake of mobile-based credit after a period of slowdown.
“Digital lenders continued to be a major source of credit to farmers, with the proportion reporting having accessed digital loans at 35 per cent in March 2026 compared to 26 per cent in January 2026,” CBK said.
The rebound comes months after farmers shifted to informal sources, including relatives and friends, amid concerns over high interest rates and repayment pressures tied to digital loans. Analysts now say the return to digital credit could reflect tightening liquidity within informal networks, pushing farmers to seek alternative financing.
Despite the resurgence, borrowing from family and friends remains the most dominant source of credit, accounting for 37 per cent of farmers in March. This underscores the continued role of informal financial systems in supporting agricultural activities.
The Central Bank of Kenya (CBK) headquarters in Nairobi.
Photo credit: File | Nation Media Group
Mobile and bank-linked platforms such as M-Pesa and digital products offered by commercial banks are driving the renewed uptake, largely due to their speed, accessibility and minimal requirements compared to conventional lending channels.
For many farmers, digital credit offers quick disbursement, making it suitable for urgent farm needs such as purchasing inputs or paying labour costs.
The CBK survey also indicates that overall borrowing to finance farming declined to 39 per cent in March 2026, down from 48 per cent in January, though slightly higher than 36 per cent recorded in March 2025.
The regulator attributed the drop to seasonal factors, noting that most farmers typically seek credit ahead of the March–May planting season.
“This possibly reflects seasonality as most farmers would seek credit before the start of the March–May 2026 rain season and the fact that the survey does not necessarily follow the same respondents over time,” CBK said.
Borrowing from informal savings and credit groups increased to 23 per cent in March from 19 per cent in January, signalling a gradual strengthening of community-based financing structures.
In contrast, uptake of loans from Savings and Credit Cooperative Organisations (Saccos) declined to 15 per cent from 18 per cent over the same period, pointing to shifting preferences among farmers.
Most farmers who borrowed did so to finance farm operations, with 88 per cent taking loans to purchase inputs such as seeds and fertiliser, up from 84 per cent in January. Another 72 per cent borrowed to meet labour costs, down from 75 per cent.
The survey was based on 428 respondents, with farmers accounting for 46 per cent of the sample, retailers 37 per cent and wholesalers 17 per cent.
