Kenyan women, youth in agribusiness get Sh3.4bn support
Women tend passion fruit farm in Uasin Gishu County. The African Development Bank (AfDB) Group has approved an equity investment of €19.2 million (about Sh3.4 billion) for women entrepreneurs in Kenya’s agricultural value chain.
What you need to know:
- The funding was provided in partnership with the European Union (EU).
- Ms Nnenna Nwabufo, the bank’s Director General for East Africa, termed the move a major milestone.
The African Development Bank (AfDB) Group has approved an equity investment of €19.2 million (about Sh3.4 billion) for women entrepreneurs in Kenya’s agricultural value chain.
The funding was provided in partnership with the European Union (EU). Ms Nnenna Nwabufo, the bank’s Director General for East Africa, termed the move a major milestone.
She said the approval signals the significance of women and youths in the agriculture sector. The World Bank’s Covid-19 Business Pulse Survey shows that many potentially viable firms are still struggling.
The demand for Micro, Small, and Medium Enterprises financing remains unmet in Kenya and has been aggravated by the disruptions of Covid-19.
The International Finance Corporation estimates an SME finance gap of $19.38 billion, representing 30 per cent of Kenya’s GDP. The agriculture sector employs the largest share of the population, especially in rural areas, and accounts for 60 per cent of exports.
According to data by the Kenya Youth Agribusiness Strategy 2017-22, 64 per cent of unemployed Kenyans are youth (18 to 35), with the majority moving away from agriculture to fast-growing non-agricultural sectors in urban areas.
Women face many constraints trying to access finance and grow their businesses. These include a lack of business management skills; legal, social, and policy barriers; poor access to networks and information; and inadequate financing options for specific needs.
Risks
Banks often perceive women-led businesses as risky, given the low quality or number of assets for collateral and the generally smaller business sizes.
Therefore, supporting women entrepreneurs and catalysing private investment in this segment is crucial to fostering inclusive economic growth.
According to the 2017 Economic Survey by the Kenya National Bureau of Statistics, commercial banks’ lending to the sector in 2016 stood at only three per cent, as the risk level of the customer segment is deemed high.
Women play a pivotal role in agricultural production. Worldwide, women represent 43 per cent of the sector’s labour force; in Kenya, that number is between 42 and 65 per cent.
However, a lack of access to land, financing, training and education, among other hurdles, place women farmers at a significant disadvantage.
This results in considerably lower agricultural yields compared to their male counterparts. Women farmers also tend to have smaller farms overall. These conditions make them more vulnerable to climate shocks that disrupt food production and result in financial hardship.
