Juhudi Kilimo is changing the way farmers do business. Our clients are smallholder farmers in very rural communities across Kenya, in dire need of services but overlooked by traditional microfinance. We finance productive, income-producing agricultural assets, from high-yield dairy cows and other livestock to irrigation equipment and greenhouses. We target assets that can produce income for farmers, food for the family, and local inputs and employment for the community.

Building on farmers' strengths, we provide market-driven services that give farmers access to the tools they need to scale up and succeed. We maximize our impact through partnerships, extensive business and agricultural training, insurance products, and existing farming groups that co-guarantee and support eachother.

Problem

Juhudi Kilimo is changing the way farmers do business. Our clients are smallholder farmers in very rural communities across Kenya, in dire need of services but overlooked by traditional microfinance. We finance productive, income-producing agricultural assets, from high-yield dairy cows and other livestock to irrigation equipment and greenhouses. We target assets that can produce income for farmers, food for the family, and local inputs and employment for the community. Building on farmers' strengths, we provide market-driven services that give farmers access to the tools they need to scale up and succeed. We maximize our impact through partnerships, extensive business and agricultural training, insurance products, and existing farming groups that co-guarantee and support eachother.

Solution

Traditional microfinance has had limited impact on smallholder farmers in Kenya. Collateral requirements, generalized products and services, and sheer distance significantly limit its reach. Our primary innovation has been to adapt financial services to specifically serve our clients, these smallholder farmers. Through partnerships and financing, we provide access to assets that create income and also improve agricultural efficiency. This leads not only to increased living standards but provides for loan repayment and collateral in case of default. To further protect farmers and allow for business growth, we worked with an insurance provider to develop livestock and other insurance products that had not been previously available. Most of the assets we finance also provide supplemental food for family consumption and both inputs and employment within the community. A farmer with a high-yield dairy cow producing over 20 liters a day, for example, can reserve several liters for home use and then sell the remainder locally to generate enough income for loan repayments and other household expenses.

Exemple

Juhudi Kilimo’s approach to alleviating poverty and driving rural economies is direct and comprehensive. We finance specific agricultural assets that offer sustainable income for smallholder farmers and create local engines of…. The majority of our loans have been for high-yield dairy cows and goats but we also finance other livestock, agro-processing and irrigation equipment, greenhouses, and transport for agricultural goods. The size and duration of a loan is adjusted for each client. The type of asset is determined by the client’s business goals and in response to local markets. Prior to each loan, microfinance officers visit the client’s farm to assess the business and advise on improvements. The first meetings of a new group are then devoted to training clients on basic finance and business. After a loan is approved officers give continued support, working with partners and local government ministries to offer targeted technical assistance on assets. Juhudi’s clients support each other through solidarity loan groups, and co-guarantee their loans through a Watano, a sub-section of five members of the group. Led by client representatives, groups are independent but get strong support and oversight from loan officers. Loan groups serve many purposes: a central meeting place for farmers to share ideas and encouragement, a place to learn about new products and services, and a forum to organize for access to better pricing and markets. To further protect clients, Juhudi provides business insurance for many assets and credit life insurance is required. All our insurance products, including an optional medical aid plan, can be financed along with the asset so that the impact to the client is optimal.

Marché

Juhudi Kilimo focuses on very rural areas. A majority of these farmers (63%) and their families live below the poverty line and 76% subsist on less than 330 Kshs ($4) a day. Farmers are the backbone of the Kenyan economy but their families often live without adequate food or then income needed to cover educational and medical costs. Agricultural production in Kenya overall is mostly geared for export, similarly depriving communities of the local economy and outputs need to grow. Equipped with the right tools though, these farms can be scaled to succeed as businesses. Kenya's unemployment rate stands at 40%, most of whom are youths who constitute 60% of Kenya's estimated population of 40 million. Young Kenyans face such limited opportunity in rural areas that they often shift in large numbers to urban centers. Juhudi has targeted very rural areas to create real opportunities for business growth and employment. In each new region into which we've expanded, we have begun by targeting areas that are removed from urban centers and have a sufficient concentration of small-scale farmers who lack access to other financial services. We then work very closely, with area chiefs and other local leaders to build relationships within the community, and with self-help groups and local suppliers. New staff speak local dialects and are recruited both locally and from the head office.