Agriculture and Livestock Development Cabinet Secretary Mutahi Kagwe has urged lenders and development partners to overhaul agricultural financing frameworks.
The CS argued that Kenya’s farmers will not achieve sustainable growth without significantly cheaper credit and a shift toward direct investment at the farm level.
Addressing delegates at the Intergovernmental Agriculture Forum in Naivasha, Kagwe said the government is pushing for agricultural loans priced at no more than 3–4%, warning that current borrowing rates remain far beyond the reach of ordinary producers.
High interest costs, he noted, continue to suppress productivity, limit expansion, and weaken the sector’s contribution to national economic growth.
“Financing guarantees must help us de-risk farmers. That percentage has to come down,” he said.
“I am proposing 4%, even 3%, if we truly want affordability.”
The CS stressed that lending terms must be grounded in the realities of agricultural production, including seasonal cash flows and commodity-specific cycles.
He criticised what he described as abstract banking models that fail to accommodate the unpredictable and climate-sensitive nature of farming.
“When we design loan terms, they must reflect the realities of what farmers produce, not generalised financial assumptions,” he said. “Financing must meet farmers where they are.”
Kagwe also issued a firm challenge to development partners, saying Kenya will no longer support agricultural programmes that consume large portions of funding on administrative overheads while delivering limited value to farmers.
He said the country has for years hosted projects that prioritise workshops, consultancies, and meetings rather than tangible improvements in production and livelihoods.
“To our donor community: we need clear KPIs,” he said.
“There is too much self-declared success—everyone claiming miracles, even 50% increases in maize yields that do not exist.”
The CS argued that the heavy focus on capacity building has reached its limit, saying farmers have yet to realise meaningful improvements despite decades of training-oriented interventions.
“Let’s forget capacity building. We have built enough capacity,” he said. “What we need now is investment that actually reaches the farmer.”
Kagwe proposed a strict funding structure for all donor-supported programmes in the agriculture sector: at least 80% of project resources should be channelled directly to farmers, with only 20% allocated to administration, logistics, and other operational costs.
He said this model would ensure that development assistance produces visible gains in productivity, resilience, and income.
The CS reaffirmed the government’s commitment to driving financing reforms that prioritise farmers’ needs, saying affordable credit and direct investment remain central to transforming Kenyan agriculture.
