Faulu Bank, GIZ Partner To Offer Green Financing For Kenyan Farmers

Editorial Desk
By Editorial Desk 3 Min Read

Faulu Microfinance Bank has teamed up with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) to offer green financing to smallholder farmers in Kenya.

This partnership is part of the Sustainable Energy for Smallholder Farmers project, which aims to promote sustainable practices and support the adoption of renewable energy technologies in the dairy and horticulture value chains.

During the pilot phase of the project, Faulu Bank plans to disburse Kshs 120 million to approximately 400 individuals across six counties in Kenya, namely Kirinyaga, Meru, Muranga, Nakuru, Machakos, and Makueni.

The funds will be used for investments in solar-powered irrigation, solar-powered cooling, solar drying, and other solar technologies.

Julius Ouma, the acting CEO of Faulu Bank, expressed his enthusiasm for the partnership, stating that it would empower traders and farmers throughout the country.

He emphasized the importance of using solar energy to improve livelihoods, increase resilience to climate change, and enhance productivity and economic competitiveness.

The project aims to demonstrate and scale up innovative and market-based business models that utilize renewable energy technologies for cooling, irrigation, and drying in the agricultural sector. It will be implemented in four phases, with the pilot phase focusing on identifying the financing needs of smallholder farmers and developing suitable financial products.

Faulu Bank will also collaborate with reputable distributor partners to provide the necessary solutions and build capacity for both staff and customers.

Through this partnership, Faulu Bank and GIZ will invest Kshs 15.2 million in capacity building and the promotion of a green financing portfolio.

This investment will benefit at least 400 farmers, who will receive funding to acquire solar water pumps and other solar-powered technologies. Currently, many smallholder farmers rely on petrol- or diesel-powered engines for irrigation, which are expensive to operate and maintain and contribute to greenhouse gas emissions.

Valerie Ostheimer, Project Leader at GIZ-EnDev Kenya, highlighted the importance of green financing in unlocking access to modern renewable energy technologies and climate-smart practices. By reducing greenhouse gas emissions and making farming activities more resilient to climate change, this initiative will significantly improve farmers’ livelihoods.

A recent report by Endev and the IKEA Foundation revealed that 58 percent of customers using solar-powered pumps reported a significant improvement in their quality of life. Furthermore, 87 percent reported an improvement in their farming practices, leading to increased confidence, production, and earnings.

The adoption of renewable energy technologies in Kenya’s agricultural sector will have a far-reaching impact, considering the country’s reliance on subsistence farming and its predominantly low-income smallholder farmers.

However, the limited awareness and affordability of these technologies, along with a lack of consumer financing options, have hindered their widespread adoption. This partnership between Faulu Bank and GIZ aims to address these constraints and drive sustainable development in the agricultural value chains.

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