Family Bank has acquired a Sh20 million loan portfolio guarantee facility from the Financial Sector Deepening (FSD) to increase its loan book to dairy farmers, cooperatives, dairy companies and input suppliers.
The two-year agreement credit guarantee facility will facilitate purchase of fodder, concentrates, minerals, artificial insemination services, propagation of feeds among other dairy industry inputs.
“The dairy value chain has the potential to generate employment and exponentially grow our economy. However, it continues to be impacted by the long severe drought and high cost of animal feed that has in turn reduced milk production in the country,” said Family Bank Chief Executive Officer Rebecca Mbithi.
“Through this credit facility, Family Bank will scale up lending to the dairy industry and help them bridge these existing challenges. With partners such as FSD, we are also able to widen our capital base to support more dairy industry players such as smallholder dairy farmers by extending credit at favourable terms,” she said.
According to the Kenya Dairy Board, the dairy sector is estimated at 14% of Kenya’s Gross Domestic Product with milk being primarily produced by smallholder dairy farmers, who account for 56 per cent of total output.
Previously, Family Bank partnered with agribusiness company Performeter and set aside Sh1 billion to support dairy co-operatives in the acquisition of fodder, and with Ndumberi Dairy Farmers Co-operative Society toincrease availability and access to good qualityfodder to a thousand dairy farmers.