Youths in Kenya Turn to Farming to Overcome Banking Challenges

Strategic Insights -

Youths in Kenya, particularly those in Nyeri County, are increasingly turning to farming as a means to overcome the challenge of accessing bank loans for small enterprises. By forming self-help groups and relying on cash flow from their produce, these groups have managed to accumulate wealth and gain access to bank loans. For instance, the Big River Revolving Fund, a coffee farming group in Kangocho, Nyeri, has 15 members who collectively earned over Sh2.2 million from 565 coffee stems. This money was used to qualify for bank loans, which in turn enabled them to diversify their activities.

Key Takeaways:

  • In Kenya, youths are using farming to overcome the challenge of accessing bank loans for small enterprises.
  • Self-help groups, such as the Big River Revolving Fund, have been successful in accumulating wealth through farming and gaining access to bank loans.
  • Coffee farming has been particularly successful, with one group earning over Sh2.2 million from 565 coffee stems.
  • This money was used to qualify for bank loans, which in turn enabled the group to diversify their activities, including investing in boda boda (motorcycle taxi) transport and buying dairy cows.
  • Paralympic Budget Committee chairman Elias Mbau notes that youths are getting frustrated in accessing the Youth Enterprise Development Fund and are instead exploring alternative means of accessing credit.
  • Experts recommend that other young investors emulate the Big River Revolving Fund model, which has been successful in accessing bank loans.
  • The education system is blamed for not exposing youths to the basics of entrepreneurship, leading to high levels of youth unemployment.

Statistics:

  • The Big River Revolving Fund earned over Sh2.2 million from 565 coffee stems.
  • The group has 15 members, each of whom received Sh150,000 from the earnings.
  • The group employed a business plan and negotiated a credit of Sh91,000 with a bank.
  • Youths can access loans of up to Sh70,000 each in turns through the Big River Revolving Fund.
  • Over 80% of youths in Kenya are not exposed to entrepreneurship skills through their education.
  • The Kenya Private Sector Alliance estimates that over 50% of youths in Kenya are unemployed.

Sources:

  • Business Daily
  • AllAfrica Global Media (allAfrica.com)
  • Elias Mbau, parliamentary Budget Committee chairman
  • Joseph Ngumi, small medium enterprise and technological transfer expert
  • Joseph Wachira, Kangocho Tea factory chairman
  • Mary Kamunya, owner of Drop Lake Dispenser Services and Solutions
  • Business Daily/All Africa Global Media via COMTEX.