April is Financial Literacy Month, and what better way for people keen on their financial growth to mark it than tuning in to expert broadcasts like NCBA’s financial clinic to learn about NCBA agribusiness financing?
As a budding farmer who spends most of her time in the village lately, I caught today’s broadcast, and it was packed with insights on the bank’s agribusiness financing in Kenya. If you are in the agricultural space or thinking about it, this is something worth paying attention to. NCBA’s agribusiness support is segmented into seven key areas: dairy, horticulture, tea, coffee, sugar, industrial crops, and agricultural processing.
In today’s session, Family TV hosted William Muguima – Sector Lead – Agriculture – NCBA Corporate Banking and Krisple Mwiti, a successful herbs and spices farmer and Director of Greenflow Consultancy.
Agriculture contributes 35% of Kenya’s GDP and supports 60% of jobs indirectly, and that makes it a major economic pillar. NCBA recognizes this and has taken a value chain approach to financing agribusiness, meaning they don’t just fund one stage of farming but the entire process right from seedling supply, fertilizer, packaging, distribution, and marketing.
For instance, tea farmers and factories get support not just for growing tea but also for processing and transportation to Mombasa for warehousing and auction. In other sectors, NCBA also supports functions such as grain milling, fruit canning, and packaging. On the distribution side, they support storage, logistics, and vehicle financing through their asset finance offering. Today I got to learn that NCBA is responsible for 36% of all asset financing in the country!
What does NCBA look into to consider financing?
They evaluate several areas, the first of them being character. That means the farmer’s borrowing history, track record, and how reliably they repay loans. Then the ability to repay, where the bank checks the client’s cash flow and income patterns. Third is the balance sheet, which sheds light on net worth, reserves, and the overall financial health of the business. Beyond that, NCBA looks at the farmers’ business plan, forecasts, budget, competitive edge, and how profitable the business is or could be. They also factor in the market risks and how likely the business is to weather unpredictable challenges.
And there are many. One major challenge is the fact that most agribusinesses are small-scale, often informal, and therefore not organized. That makes them risky for lending, but NCBA sometimes designs programs to support clusters under an umbrella so that the requirements are less strict on individuals. The bank also has a policy of meeting clients where their businesses are, hence assessing the situation on the ground and being able to serve farmers better.
Agribusiness has some unique and very likely risks like climate change, drought, pests, or crop failure and for this, NCBA’s answer is insurance. Other than working with reliable insurance partners, the bank also has its own in-house insurance services to cushion farmers from losses due to factors outside of their control. Additionally, for rain-reliant farmers, NCBA supports sustainable alternatives like irrigation systems and borehole water access to enhance resilience and productivity.
Read also – Financial Literacy Month: NCBA Champions Youth Financial Empowerment
Partnerships are crucial in any operation, and for agribusiness financing, NCBA does not always operate in isolation but brings in development finance institutions, NGOs, and multilateral partners to make financing more affordable. They also host industry forums so that farmers can hear from experts, share experiences, learn about export markets, and make business contacts.
Interestingly, women account for the largest number of agribusiness financing clients because they make up most of Kenya’s small-scale farmers. It is a reminder that financial inclusion also means gender inclusion, and it’s good to see banks noticing and responding to that.
NCBA’s pricing model is built on fairness, and the bank’s overall goal is to fund businesses in a way that actually works for the people running them. If agribusiness is your field, especially as a woman, this is a good time to engage with the bank and ask how its financial products can support your operations. April may be Financial Literacy Month, but what you do with the information matters all year.
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