Micro Enterprises Support Programme Trust (MESPT) has been facilitating access to finance by providing concessional financing to SACCOS and microfinance institutions for on-lending to smallholder farmers.
Rebeca Amukhoye, the Chief Executive Officer (CEO) MESPT said their work has been mainly to ensure that smallholder farmers are able to access credit to invest in agriculture.
“We do this by ensuring that SACCOs are able to develop appropriate financing products for the different agricultural value chains, ensuring that they have the ability to provide financial literacy for the smallholder farmers,” she said.
Amukhoye, who was speaking to KNA on the sidelines of the ongoing Financing Agri-food Systems Sustainability Summit (FINAs), said they have also been working directly with the farmers to make sure that they are able to increase productivity per unit area, increase incomes that come out of the sale of their commodities, facilitate access to markets, and ensure that they have access to a ready market for their produce.
“We are integrating smallholder farmers into Agri-SMEs, exporters, aggregators and even processors, while at off take level, we catalyze the same group to access working capital that enables them to buy and pay for produce from smallholder farmers,” she explained
Amukhoye, who explained about funding resilient food systems, said that MESPT’s entry point in supporting youth entrepreneurs is making sure that their idea makes economic sense and that they are able to make money from the business.
“We help them structure their business, we support them to appreciate and understand the importance of regulation and ensure that they are able to comply with the basic regulation within the country, but also ensure that their products are certified and that they meet the minimum thresholds of food safety so that they can be able to drive commodities to the market”, she said
The CEO noted that it is only through structuring their businesses, ensuring good record keeping, and good financial management that the youth can be able to access financing.
Once their business is able to thrive, Amukhoye said it then becomes easier for them to access debt financing either from SACCOs, MFIs, or even from banks.
While officially opening the 3-day FINAs meeting, Agriculture Cabinet Secretary Mutahi Kagwe talked about the challenges of financing farmers, saying financial institutions are still not doing much to support them, especially the youth.
Currently, MESPT has a program supported and financed by DANIDA that is working in 12 counties, and according to Amukhoye, their approach is making sure that all the technologies the youth are adopting for their businesses are refined and are able to make economic sense.
We have taken the youth through a lot of training, exposure visits, supporting them to regularize their businesses and even providing cost share in terms of blended finance to support their business”, she said
She acknowledged that sometimes it’s not easy for young people to straightaway access credit, and therefore they help them grow their business, get some income out of it, and then they can be able to access credit.
“Credit that is provided too early into a business can also be very destructive and so it is good to look into credit that really catalyzes growth but not credit that will undermine development”, she said
The FINAS conference has been talking a lot about de-risking agriculture, and Amukhoye said MESPT works directly with smallholder farmers because there’s a lot of assumption that most farmers are bankable, and yet they are actually excluded.
We work with these farmers by structuring their access to market challenges and by ensuring that they have some level of skill in financial literacy, which helps them to look at their enterprises as a business, and when they are at a level they can efficiently undertake a cost-benefit analysis of whatever commodity or livestock enterprise they are keeping, they begin to understand the dynamics of money and how they can be able to access credit.
Various speakers at the conference opined that the biggest gap in facilitating access to finance for farmers and the youth is really making sure that farmers have a source of income that is sustainable and that can enable them to engage in meaningful business but also access to finance.
The CEO called upon women and youth not to keep their ideas under the table but to bring them to the fore, identify opportunities to learn from what other people have done, and interact and engage with different stakeholders in development within their counties.
“Get to know what are the priorities of your county government are in terms of development priorities. How can you tap into those development priorities to be able to support and grow your enterprise?” she said
Amukhoye further asked the youth to also interact with fellow young people in the same space so that they can be able to diversify and grow their network and be able to create a functional ecosystem
The FINAS conference is actively addressing the role of youth in agriculture and agribusiness.
The conference, emphases on the need for innovative financing mechanisms that empower smallholder farmers, especially women and youth, and incentivize sustainable practices
The theme of the conference is “Taking Ownership: Rethinking Sustainable Financing for Africa’s Food Systems by Recognizing the Importance of Youth in Transforming the Agricultural Sector and Fostering Sustainable Solutions.”
By Wangari Ndirangu
