Agriculture at the Heart of Equity Bank’s Financial Model

The current global economic crisis has led to a sharp increase in food prices. It is a stark reminder of the importance of increasing our food production capacity and reducing reliance on global supply chains for critical food items. 

Equity has consistently supported farmers and other primary players in the agriculture value chain to easily access farm inputs and machinery to enhance food security and empower small-scale farmers to farm the future, as underpinned in the first pillar of the `Africa Recovery and Resilience Plan.’

A notable area of intervention is the strategic Public Private Partnership between the Government of Kenya (GoK), the European Union (EU) and International Fund for Agricultural Development (IFAD), and Equity Bank; Kenya Cereals Enhancement Program (KCEP-CRAL).

The program aims at supporting smallholder farmers to increase productivity and profitability of cereal production by ensuring that targeted smallholder farmers have access to farm inputs, value chain financing, linkage to markets, post-harvest management and investments in interventions that build resilience to climate change and sustainable natural resources management.

The Bank, through its subsidiary Equity Group Foundation (EGF), has built the capacity of value chain stakeholders through financial literacy and entrepreneurship training. To date, 47,608 farmers have been trained on Financial Education, while 209 agro-dealers have been trained on advanced financial management.

In addition, a total of 54,267 farmers have already benefitted from the program through accessing certified farm inputs worth KES 2.1B via the E-voucher platform.

Through affordable financing, Equity seeks to make the agriculture ecosystem more coordinated, connected, and capacitated, with mechanization as a key pillar driving higher throughput of raw materials and leading to more inclusive industrialization of Africa.

In June this year, Equity announced a partnership with CFAO Group to provide farmers with financing to purchase Case IH and Captain Tractors through the Bank’s asset finance credit facilities.

Through this partnership, Equity provides farmers and individuals with up to 80% financing with flexible terms and at attractive rates with an additional option of allowing them to adjust their repayment terms based on the farming season, promoting the increased adoption of mechanization in agriculture.

Equity Group Managing Director and CEO Dr James Mwangi underscored the agriculture sector’s important role when announcing the partnership with CFAO Group.

“We are doing everything we can to increase agriculture production. We want to secure the values and aspirations of our people, and with agriculture being 33% of Kenya’s GDP, capturing 40% of employment with 40% of that in rural areas and with almost 65% of agriculture accounting for foreign exchange, for us at Equity this is important.”

Equity Group’s 2022 half-year financial results released in August showed that 8% of the lender’s KES 650.6 billion went to the food and agriculture sector. Young people in agriculture, small-scale, medium scale and large-scale farmers also benefit from financial and digital literacy training, enhancing their money and business management skills and wealth creation.

Additionally, the Bank’s digitizing its customer touchpoints to deliver flexibility and convenience also aligns with the theme of this year’s ASK Show series: “Promoting Innovation and Technology in Agriculture and Trade.”

Today, farmers can access instant loans of between KES 100 and KES 3 million from the convenience of their mobile devices anywhere and at any time by dialling *247# on any network or through their Equitel lines or through the upgraded Equity Mobile app that can be downloaded from Play Store: https://bit.ly/EquitymobileAndroid for Android users or App Store: https://bit.ly/EquityMobileIOS for IOS users.

After a two-year hiatus, the Nairobi International Trade Fair opened its doors on 26^th September 2022 to 2^nd October 2022.

This was exciting as show enthusiasts, including farmers, students, children, and other participants from across the region, could experience the different technologies and innovations in agriculture.

Equity’s dedicated participation in the Nairobi International Trade Fair and the recognition as the Best Bank in Kenya in Agriculture and Livestock Financing by the 2022 Think Business Banking Awards indicates that farmers and other agriculture players can tap into the Bank’s reach to grow.