Faulu Microfinance Bank has forged a groundbreaking partnership with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) to revolutionize the dairy and horticulture value chains in Kenya.
The partnership marks a significant stride in the Sustainable Energy for Smallholder Farmers project, which spans across Ethiopia, Kenya, and Uganda, aiming to uplift local farmers through accessible green financing.
The collaboration sets the stage for a transformative initiative, where smallholder farmers within the dairy and horticulture sectors will gain access to green financing, an unprecedented avenue for enhancing their productivity and resilience.
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The bank is committed to allocating Sh120 million during the pilot phase, targeting about 400 individuals spread across six counties: Kirinyaga, Meru, Muranga, Nakuru, Machakos, and Makueni.
The financial support will be directed towards investing in an array of solar-powered technologies, including irrigation, cooling, and drying systems.
Julius Ouma, the Chief Executive Officer of Faulu, expressed enthusiasm about the partnership, saying, “We are more than happy to partner with GIZ in empowering our traders and farmers across the country. Because of this project, we will support smallholder farmers in accessing and using solar energy to improve their livelihoods and increase their resilience to climate change. We also hope that our support will increase their productivity and economic competitiveness.”
The comprehensive project is geared towards demonstrating and scaling up innovative, market-driven business models that harness renewable energy technologies.
These technologies are poised to revolutionize agricultural practices by focusing on cooling, irrigation, and drying solutions. In a phased approach, Faulu Bank will ascertain the financing requirements of smallholder farmers and design tailor-made financial products.
The bank will also identify reliable distributor partners, fortify the capacities of both its staff and potential customers, and facilitate the acquisition of solar-powered equipment.
Faulu and GIZ are injecting a combined Sh15.2 million into capacity building and promoting a green financing portfolio.
This effort aims to benefit at least 400 farmers, empowering them to acquire solar water pumps and other solar-powered technologies.
Valerie Ostheimer, Project Leader at GIZ-EnDev Kenya, highlighted the significance of the partnership.
“Through the provision of green financing solutions, this partnership will unlock access to modern renewable energy technologies and climate-smart practices that improve farmers’ livelihoods, greenhouse gas emissions are reduced and their farming activities become resilient to climate change," she stated.
According to a recent report by Efficiency for Access, co-authored by EnDev and the IKEA Foundation, the impact of solar water pumps on farmers' lives is remarkable.
The report reveals that 58 per cent of users experience a significant improvement in their quality of life, with 87 per cent reporting better farming outcomes, increased confidence, higher production, and augmented earnings.
In a country where agriculture forms the backbone of the economy, predominantly driven by subsistence farming among low-income smallholder farmers, the introduction of renewable energy technologies stands to catalyze transformation within the sector.
Overcoming the barriers of awareness and affordability, the partnership between Faulu Microfinance Bank and GIZ heralds a new era of sustainable and resilient farming practices for Kenya's agricultural landscape.
