“Green Loans” Help Kenya’s Farmers

One quarter of the 40 million people who live in Kenya are farmers. But few of them have ever been shown how to increase their crops or use loans to make their farms larger. Most of these farmers refuse to accept a loan. They have watched other farmers lose their livestock, their animals, or even their farms when they could not repay the lender.

But now there is a new kind of lender. A company is offering “green loans,” and teaching farmers how to protect their land.

Fifty-year-old Samuel Karioki has been farming since he left school. Every year he has struggled to grow cabbage in this mountainous area a few hours from Kenya’s capital, Nairobi. But Mr. Karioki is not struggling this year. His crop is very big.  And he has added potatoes.

His struggles ended because he received a loan of $90 to buy high-quality seeds and fertilizer. This is the first time he has had the money to do that.

He says he’s had a lot of problems, including lack of money and demand for his crops and attacks from insects and diseases. He says he never wanted to take a loan before because he feared he could lose his farm. He says he has seen other farmers lose everything to aggressive lenders when they could not make the payments.

But he has had a different experience. A new micro-finance company called F3 Life gave him a loan. It offers small cash loans of as little as $20 to as much as $180.

Micro-finance Helps Farmers

The program was designed by conservationist Mark Ellis-Jones. It includes free monthly training on how to increase the amount of crops a farmer grows. Mr. Ellis-Jones says the loan interest rate is lowered if a farmer works to conserve the land.

“We also provide a loan, where we peg the interest rates to the quality of soil conservation that a farmer is practicing. We ask farmers to build grass strips across the contour of their slopes which prevent the loss of top soil from their farms.”

As the loan amounts increase, farmers are asked to plant trees to keep soil from being washed away. F3 Life says that such simple measures can extend the life of the soil from about 20 years to 1,000 years.

In Mr. Karioki’s area of Kenya, there are large areas of brown land where there were once productive farms. Farmland may disappear from the area in 10 years. That kind of damage could hurt Kenya’s ability to feed its people.

It is a worldwide problem. The world has lost one third of its farmland over the past 50 years. 

Saving Soil

Ngigi Obadiah is with F3 Life as an agronomist, an expert in soil management and crop production. He hopes to expand the “green loans” program throughout Kenya. He is trying to save the country’s soils as its population rises sharply.

“At the moment we are servicing 52 clients. We are anticipating to increase the number to 350 in one year’s time. In two years’ time we anticipate to have 10,000, and about half a million within the next five years.”

Farmer Samuel Karioki says many people in his town are talking about his cabbage. And he says many farmers now want a green loan. Mr. Karioki says he plans to use his increased profits to buy a truck so he can sell his crops at a farmer’s market.

Now, because he does not have transportation, he sells his crops to others.  His buyers make a large profit selling his products at the market. When he buys that truck, he will be able to keep all of the profits himself.