Thousands of farmers in Kenya are being offered loans to help them cope with rising input costs.
The offer comes from the Nigerian-based AFEX group, which is extending its business into what is one of the most diversified economies in east Africa.
AFEX Fair Trade Limited (AFTL) is making $1 million available to about 5,000 Kenyan farmers so they can gain access to seed and fertiliser for their crops despite the ever rising commodities prices.
Part of the company’s broader pan-African growth targets, the expansion will allow AFEX to replicate its success in Nigeria in securing better livelihoods for smallholder farmers.
It will also enable more seamless access to pan-African commodities trading across the continent while bolstering the continent’s food security.
AFEX has a goal of trading over 500,000 metric tonnes of agricultural commodities by in Kenya by 2025.
Analysts estimate 7.9 million people in Kenya lack sufficient food for consumption – some 15.4 per cent of the total population.
A AFEX pilot scheme in the country concentrated on maize but there are now plans to expand to include rice, sorghum and coffee.
In addition to Kenya, AFEX plans to expand to Benin, Togo, Ghana, Côte d’Ivoire, Tanzania, Ethiopia, Uganda, and Zambia within the next 10 years.
Having built itself from the ground up in an agricultural sector widely perceived as one difficult for businesses to operate in, AFEX is anticipating strong growth and significant measurable impact in Kenya’s relatively more developed agricultural sector.
Kenyan farmers have, on average, larger holdings than their Nigerian counterparts, in addition to better developed storage and distribution facilities.
Ayodeji Balogun, CEO at AFEX, said: “This is one of the most dynamic commodities markets in the world and we are excited to work with Kenyan farmers to help them scale their operations.
“We are acutely aware that increasing food production is futile without an efficient and robust warehousing system to underpin commodities trading, and that technology is key to developing the whole agriculture space in Africa in the coming years.
“I started my career building capital markets in East Africa and understand the challenges of a fragmented supply chain, inefficient price structures and market volatility.
“We’ve been massively encouraged by what we’ve seen since our pilot phase rolled out with thousands more farmers experiencing productivity, value capture and access to structured mechanisms for commodity trading in Kenya.”
Tabitha Njuguna, MD, AFEX Fair Trade Limited (AFTL), Kenya, pic-
tured, added: “The
technology power-ing our operations is one of the best on the continent and is instrumental to our capacity to provide access to logistics delivery, advisory services, inputs, and
crucially, access to the market, which are all key to the future of agriculture in Africa.
“We want to dismantle one of the biggest barriers for farmers growing their business – access to finance.
“So far, we’re delighted to have enabled 70 per cent of the 5,000 Kenyan farmers who approached AFEX for input loans and we are committed to empowering many more farmers over the next few months.”
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