Feast and Famine: Financial Services for Rural Kenya

Abstract

Introduction: Over the last few years there has been increasing mention of the financing problems facing farmers. Whenever they are asked to list their problems, lack of credit is usually high on the list. As a result all the government recent policy documents have raised the issue and pledged to do something to address it. In the Poverty Reduction Strategy Paper 2001-2004 agriculture was ranked as the number one sector, crop development the priority sub-sector and inefficient rural financial systems the second most binding constraint. Government noted farmers and the rural sector cannot progress without the credit and financial services they have been starved of, and committed to promoting an innovative an efficient rural finance and credit supply system for smallholders and rural primary processors by developing modalities to support schemes through farmer organizations, NGO’s, CBO’s, rural SACCOs, input suppliers and processors. The practical details, institutional and policy arrangements were to be worked out before large amounts of public money are channeled into particular institutions.