Absa Bank Kenya PLC has signed a KES 1.26 billion financing deal with eco.business Fund to support climate-smart agricultural practices in Kenya.
The funding allocation aims to enhance resource efficiency, bolster food security, and reduce the impact of climate change on agriculture.
In a joint effort, the two organizations will strive to enhance the accessibility and calibre of funding committed to agricultural value chains while advocating for sustainable approaches throughout the industry.
Supporting sustainable and climate-resilient agricultural practices and strengthening local value chains are some of the fund’s top priorities. Our investment will contribute towards equipping various value chain actors in Kenya, including agricultural producers, aggregators, processors and exporters: These clients will use the finance and knowledge to achieve more biodiversity and climate-friendly sustainable production and exports while alleviating food insecurity. It is also the first step in a great partnership with the Absa Group across sub-Saharan Africa.
Michael Evers – eco.business Fund Board of Directors Chairperson
The agricultural industry in Kenya plays a significant role in the country’s economy, making up around 50% of the GDP (including linkages), employing 40% of the workforce, and generating 60% of export revenues. However, the sector faces various challenges related to the economy and climate, leading to stagnant yields and contributing to food insecurity.
Market access opportunities are limited, and value chain actors bear the burden of increased post-harvest losses and unstructured value chains.
Additionally, implementing climate-smart agriculture practices requires a high financial and technical threshold, challenging many farmers. As a result of fragmented supply chains, outdated practices, and poor infrastructure, an estimated one-third of Kenya’s agricultural production goes to waste.
As a bank, we are fully cognisant of the immense contribution that agriculture makes to Kenya’s economy and as the country’s economic mainstay and hence our collaboration with such like-minded partners towards the continuous growth and development of the sector.
Absa Bank’s Business Banking Director – Elizabeth Wasunna
Elizabeth Wasunna also stated that agribusiness has been integrated into its business strategy as a growth pillar. They follow a value chain approach and provide solutions for input providers, primary producers, aggregators, and agro-industry players. This partnership complements its approach of providing access to markets, information, mentorship, coaching, and sustainable finance.
To promote impact and sustainability, the eco.business Fund plans to enhance its facility with a technical assistance program focusing on building capacity throughout the value chain.
The first program will involve training over 300 value chain actors and Absa Bank clients in financial literacy and post-harvest loss reduction in the cereal, horticulture, and dairy value chains.
Furthermore, the eco.business Fund intends to organize roundtable discussions to build relationships and share information with exporters, aggregators, and processors on prioritizing sustainability in two emerging export crops: avocados and macadamias.
Read Also: Acorn, Absa Announce KES 6.7 Billion Financing Deal For Students’ Affordable Housing
