AgriFinance
Beyond M-PESA: The New Infrastructure Layer For Kenya’ s AgriFinance
By Peter Maina
A sector that feeds our nation is still starving for capital. I normally go to the market on Saturday mornings. The stalls overflow with fresh produce, buckets of potatoes crates of tomatoes, bundles of Sukuma Wiki still damp from the farm. Agriculture touches almost everything in our economy. It contributes over 22 % of Kenya ' s GDP, a figure that climbed to roughly KSh 3.6 trillion in 2024. It employs over 40 % of the total population and up to 70 % of the rural workforce.
Now open the Central Bank of Kenya’ s latest Bank Supervision Annual Report. Scroll to the sectoral distribution of gross loans. Agriculture’ s share of total bank credit sits at 4.4 %. That is KSh 180.6 billion out of a total loan book of KSh 4,070.2 billion as of December 2024.
Read that again. A sector responsible for nearly a quarter of the economy receives less than a twentieth of formal bank lending. ��������������� ��� ������ ����� ��� ������ ����� ��� ��������� ��� �������- ������� ��� ���� ����� ������������� ��� ����� said Simon Kinuthia, Head of Agribusiness at Absa Bank Kenya, at a forum in Nairobi late last year. ���������� ������������ He is right. And the data tells us exactly why the gap persists. What the CBK Numbers Actually Say
The CBK’ s 2024 Bank Supervision Annual Report, published with data through December 2024, paints a detailed picture of agricultural lending in Kenya.
Agriculture’ s shrinking slice of the pie
Out of 11.7 million total loan accounts in the banking system, agriculture accounts for just 117,524, roughly 1 %. Its share of gross loans has hovered below 5 % for years. In 2020, the figure was closer to 3.6 %. By December 2024, it had slowly gone up to 4.4 %, but the absolute amount, KSh 180.6 billion, remains small against the sector’ s economic weight.
Credit growth is slowing down
Growth in credit to agriculture peaked at around 22.3 % year on year in 2022, driven partly by post-pandemic recovery and government push for food security. That growth has since fallen sharply. By 2025, the pace had slowed to single digits, roughly 9.7 %. Meanwhile, overall private sector credit growth stalled across the board, with total
The collateral problem is not that farmers have no assets. It is that their assets, standing crops, warehouse inventories, future harvests, even the trees themselves, are invisible to the formal financial system. Tokenisation changes that as it turns illiquid agricultural assets into bankable collateral
gross loans actually declining 2.7 % from KSh 4,183.4 billion in December 2023 to KSh 4,070.2 billion in December 2024.
The Non-Performing Loan( NPL) story is more nuanced than banks admit
Agriculture accounted for 4.5 % of total NPLs, broadly in line with its 4.4 % share of the loan book. Compare that with real estate, which held 11.7 % of loans but a disproportionate 18.5 % of NPLs. Or manufacturing at 15.7 % of loans and 17.9 % of NPLs. The numbers suggest agriculture is not the riskiest sector on the books. Yet banks continue to treat it as if it were.
So why the reluctance to lend?
The CBK’ s own Agriculture Sector Survey from September 2025 revealed that only 31 % of farmers had borrowed to finance their activities, down from 41 % just two months earlier.
The reasons are structural, not temporary. Lenders demand collateral of up to 120 % of loan value, effectively shutting out most smallholder farmers who lack formal land titles. Climate induced shocks, floods and droughts in the same year, make underwriting seasonal crops feel like guessing the weather.
High lending rates, even after monetary policy easing, remain the most cited barrier to credit in the CBK’ s own surveys. And the dominance of informal finance means that much of agricultural lending happens through SACCOs, family networks, and mobile platforms that never appear on a bank’ s balance sheet.
The result is what experts call the“ missing middle” in agricultural finance: loans too risky for commercial banks yet too large for microfinance institutions. Across Africa, this adds up to a $ 65 billion financing gap, according to the Alliance for a Green Revolution in Africa.
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