More than 15,000 smallholder farmers from Kwale, Kilifi and Lamu counties are set to benefit from an initiative which will see them access finance from European Trust Fund to enable them grow cashew nuts and sesame as reports shows that lack or inadequate funds has been a challenge to most farmers.

According to the Scaling up Agricultural Credit in Africa, Frontier Issues Brief 2016 by One Acre Fund, Providing smallholder farmers with access to credit is essential to unlocking long-term, sustainable gains in farmer productivity and incomes.

Without financing, smallholder farmers cannot afford the relatively high upfront costs of quality seed and fertilizer, relying instead on poor quality seed and little to no fertilizer among other challenges.

The brief also indicates that many farmers resort to informal lending from family, friends, moneylenders, or other value chain actors such as input suppliers, buyers, and traders. However, these other sources charge much higher interest rates than commercial lenders, sometimes as high as 10 times and access is uneven across the population.

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The European Trust Fund project which is supported by the European Union (EU) through member countries such as Slovakia, Poland, Czech Republic and Hungary in connection with Ten Senses Africa Limited and Farm Africa will see smallholder farmers brought into the cashew and sesame value chain, significantly raising their incomes from the crops.

The EU project aims at raising and distributing over one million improved cashew and sesame seedlings and seeds for over a period of four years targeting the farmers within the said region.

In addition, farmers will be certified as producers of organic and fair-trade cashew and sesame. A cashew factory with a capacity of 2,400 tonnes a year is also in plan.

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FinScope estimates that 30 to 60 per cent of the rural population in sub-Saharan Africa has no access to credit at all. Therefore, the EU initiative are among the innovative and creative approaches which are needed to successfully provide access to credit for smallholder farmers.

Despite the lack of the lack of adequate supply of smallholder financing in Kenya, there are also several organizations which are using innovative tools to reach rural farmers. These include Juhudi Kilimo, BRAC and One Acre Fund.

Juhudi Kilimo provides asset-based loans to more than 20,000 smallholder farmers in Kenya, BRAC whis is based in Bangladesh, provides credit and savings to more than four million people in more than 280,000 groups across the country while One Acre Fund offers more than 280,000 farmers in Burundi, Kenya, Rwanda, and Tanzania seed and fertilizer, financing, training, and market facilitation services.