1

PARTNERING WITH FARMERS THROUGH MICRO FINANCING

AGRICULTURE

ESTHER MUIRURI - EQUITY BANK

FARA CONFERENCE

ACCRA - GHANA

1

2

EQUITY BANK

Our purpose We exist to transform the lives and livelihoods of our people socially and

economically by availing to them modern, inclusive financial services .

Our VisionTo be the champion of the social-economic prosperity of the people of Africa

Our mission

We offer inclusive,customer focused financial services that socially and economically empower our clients and other stakeholders

EQUITY BANK’s CASE FOR AGRICULTURE

Equity Bank strives to support agriculture through inclusive financial intermediation to transform agriculture from subsistence to commercially sustainable enterprises that have capacity to create employment, wealth, foreign exchange and enhance food security.

The Bank approached agriculture through partnerships with like minded players within the agricultural value chains

With special focus to the smallholder farmers the bank seeks to understand the needs of the farmers and develop products and services that meet those needs.

The Bank further develops policies and processes that can address the specific requirements for the smallholder farmers

Over the years Equity Bank has gained substantial experience largely from learning from the dynamics of dealing with smallholder farmers

3

Why partnership with farmers ?

Constitutes a Large “underserved” market –the Base Of the Pyramid (BOP)

To promote economic empowerment by redistribution of

wealth through access to financial resources

Enabling micro enterprises (farmers, processors, transporters etc) to contribute to the economy and be part of the financial system

A Social responsibility to avail financial services to the lower segment majority of our rural community

4

Benefits of partnerships

Allow partners to specialize in their areas of strength

Reduce the operational costs of smallholder producers

Spread risks among partners Achieve economies of scale Allow growth and expansion Ensure cash flow for the producers and

processors/buyers Generate opportunities for other BDS players

5

Challenges and mitigation

Largely dependant on rainfall

6

Challenges and mitigation

Lack of collateral to

access credit:

7

Challenges and mitigation cont…..

Smallholder farmers are spread over large geographical areas

Develop cost effective mechanism through technology to reach out to the farmers such as mobile banking , agency banking

8

9

Our experience in partnering with smallholder

Have established many strategic partnerships to support farmers through financial intermediation such as :-

Tea Farmers through KTDA Dairy sector with procesors like NKCC and

Brookside Dairies Livestock through KMC and NGOs Partnerships with horticultural exporting

companies Partnerships with Seed, Agrochemical and

fertilizer companies Partnerships with many local Parastatals and

other Development Agencies like WFP, FAO, WB, GIZ, IFAD, AGRA

9

10

EXAMPLE –KILIMO BIASHARA PARTNERSHIP

Is product developed through Partnership between Equity Bank, AGRA and IFAD through Ministry of Agriculture . Also supported by World Bank through GOK funding from EU Under risk sharing facility.

Objective: To increase food security and household income

for farmers To support commercialization of agricultural

activities among Kenyan farmers Has reached over 60,000 farmers and agro

dealers with over ksh3.5 Billion (appx. over $41m) in loans.

10

Kilimo biashara partnerships

Seed CompaniesAgro

traders,millers,WFP EAML

Using grain

handlers to promote

warehouse receipt

Farmers financed

to produce

Stockist/ Dealers outlets

Equity bank,MOA and other Developm

ent Partners.

11

Harvesting fresh produce for export

12

Supportive infrastructure

0ver 150 licensed country-wide branch network supported by over 550 Visa branded ATM’s, 4500 Points of Sale (POS), and over 5,000 agents network

EAZZY 24/7 service – allows customers to access banking services on their mobile phone.

13

Capacity building on farmers

Financial Literacy is a service offered by Equity Group Foundation to support farmers to develop better financial management skills

Relationships managed by qualified extension staff in Equity Bank branches across the country

14

Our products

Farmer friendly remittance account that encourage farmers to save with no ledger fees –accessible through EAZZY 24/7 and Agency network

Loans at affordable interest rate administered using group and individual lending methodologies

15

16

Support required Awareness creation of existing opportunities Entrepreneurial Capacity building through

collaboration with partners Access to credit to farmers and value chain players Access to markets and competitive prices- to

support sustainable commercialization Use of technology to drive the business

16

17

(insert the SMS banking poster)

THANK YOU Email: info@equitybank.co.ke

Web site: www.equitybank.co.ke

18