The Agricultural Finance Corporation (AFC) is a vital player in Kenya’s agricultural development. Established in 1963 and later incorporated under the AFC Act of 1969, the corporation’s primary goal is to promote agricultural growth by providing financial solutions to farmers, agribusinesses, and other agricultural stakeholders. With a focus on enhancing productivity, AFC offers various loan products tailored to meet the specific needs of farmers and agribusinesses across the country.
This article delves into the diverse loan products offered by AFC, offering insights into each product’s eligibility criteria, features, and repayment terms. Whether you are a farmer looking to expand your operations or an entrepreneur venturing into agribusiness, AFC provides valuable financial support to help you succeed.
1. Machinery Loans
Overview
AFC offers machinery loans designed to facilitate the purchase of essential farm equipment that can improve production and transportation. These loans are available to both individuals and groups.
Key Features
- Loan Terms: 2-5 years with annual installments
- Eligibility: Individuals and groups
- Repayment Period: Annual installments over 2-5 years
- Interest Rate: Subject to AFC’s prevailing rates
- Items Financed:
- Farm machinery and implements
- Pickup trucks and farm transport vehicles
Requirements
- A written quotation from reputable suppliers
- Joint registration of machinery/vehicle with AFC
- Comprehensive insurance coverage for the machinery
- A minimum deposit of 30% for new machinery and 50% for reconditioned machinery
2. Agribusiness Loans
Overview
Designed for traders, transporters, marketers, and processors in the agricultural sector, the Agribusiness loan aims to provide startup capital or boost operations for those in agricultural micro-enterprises.
Key Features
- Loan Terms: Up to 3 years
- Interest Rate: 10% per annum
- Eligibility: Individuals and groups involved in agribusiness
- Repayment Period: Flexible repayment terms based on business cycles
- Items Financed:
- Working capital for agricultural businesses
- Equipment and machinery for agribusinesses
Requirements
- Viable business plan with evidence of business operations
- Tangible collateral to secure the loan
- A 20% equity contribution towards the project
3. Livestock and Fisheries Development Loan
Overview
This loan product is aimed at improving livestock farming and fish production. It offers financial support for dairy, beef, poultry, and aquaculture ventures.
Key Features
- Loan Terms: 2-5 years
- Eligibility: Individuals and groups engaged in livestock or fisheries production
- Repayment Period: Annual installments over 2-5 years
- Items Financed:
- Dairy and beef cattle production
- Poultry, piggery, and beekeeping operations
- Fish farming equipment and infrastructure
Requirements
- Proof of experience in livestock or fisheries management
- Tangible collateral to secure the loan
- Feasibility study of the project
4. Cash Crop Loans
Overview
AFC provides loans to support the production of cash crops such as tea, coffee, sugarcane, and horticultural crops. These loans are geared towards crop establishment, maintenance, and processing.
Key Features
- Loan Terms: 2-5 years
- Eligibility: Individuals and groups
- Repayment Period: Annual installments
- Items Financed:
- Crop establishment and maintenance costs
- Processing equipment and operating costs
Requirements
- Tangible collateral to secure the loan
- Approved crop varieties for cultivation
- Availability of nearby processing facilities
5. Horticulture and Floriculture Development Loans
Overview
AFC supports horticulture and floriculture businesses with financing options to improve production and expand operations in fruits, vegetables, and flowers.
Key Features
- Loan Terms: 2-5 years
- Eligibility: Individuals and groups
- Repayment Period: Annual installments
- Items Financed:
- Fruits, vegetables, and flowers
- Greenhouses, water supply systems, and packaging equipment
Requirements
- Relevant experience in horticulture or floriculture
- Compliance with regulatory standards
- Adequate water supply for the project
6. Water Development Loans
Overview
Water is critical for agriculture in Kenya, and AFC’s Water Development Loans help farmers invest in water infrastructure for irrigation and livestock use.
Key Features
- Loan Terms: Flexible repayment terms based on project specifics
- Eligibility: Farmers requiring water infrastructure
- Items Financed:
- Water tanks, boreholes, and shallow wells
- Irrigation systems, pumps, and related infrastructure
Requirements
- Proof of suitable water catchment
- Water quality test certificate for boreholes
- Suitable acreage for irrigation (minimum of 5 acres for certain crops)
7. Seasonal Crop Credit
Overview
This product is designed to support the production of food crops that have a short maturity cycle, such as maize, wheat, and potatoes.
Key Features
- Loan Terms: Up to 12 months
- Eligibility: Individuals and groups engaged in seasonal crop production
- Repayment Period: Short-term (12 months or less)
- Items Financed:
- Production and harvest costs
Requirements
- Suitable crop for the loan product
- Tangible collateral to secure the loan
- Minimum acreage requirements (5 acres for maize and wheat)
8. School-Based Loans
Overview
AFC also supports school farming initiatives through loans that subsidize the costs of school feeding programs. This product targets primary, secondary, and tertiary institutions.
Key Features
- Loan Terms: 1-5 years
- Eligibility: Primary, secondary, and tertiary institutions
- Items Financed:
- Agricultural inputs for crop and livestock production
- Farm infrastructure and machinery
- Horticulture and agribusiness operations
Requirements
- A proposal for the intended project
- A Vuna Relationship Account with AFC
- Adequate land size for the proposed project
9. Agricultural Finance Corporation and Feed the Future Kenya Crops and Dairy Market Systems Activity Co-financing
Overview
AFC collaborates with USAID to co-finance projects aimed at increasing agricultural production and improving food security in Kenya. The Feed the Future initiative focuses on reducing poverty and malnutrition.
Key Features
- Loan Terms: 5-year program (October 2017 – September 2022)
- Eligibility: Farmers and agribusinesses involved in food production
AFC Branches Across Kenya
AFC has a wide network of branches across the country, ensuring easy access to its loan products for farmers and agribusinesses in both rural and urban areas. Some key AFC branches include:
- Head Office: Development House, Moi Avenue, Nairobi
- Nyeri Branch: Bondeni Rd, Nyeri Town
- Thika Branch: Karanja Street, Thika Town
- Nakuru Branch: Kijabe Road, Nakuru
- Kisumu Branch: Oginga Odinga Rd, Kisumu
For a full list of AFC branches and their contact details, visit the official AFC website or the branch nearest to you.
The Agricultural Finance Corporation plays a pivotal role in supporting Kenya’s agricultural sector through a wide range of loan products. Whether you’re a farmer seeking to invest in machinery or an entrepreneur venturing into agribusiness, AFC provides accessible financial solutions that cater to various agricultural needs. Take advantage of these opportunities to grow your agricultural business and contribute to Kenya’s food security.
If you’re interested in any of AFC’s loan products, visit your nearest branch or contact them today to begin your journey towards agricultural success.
