Family Bank has entered into a partnership with Performeter Agribusiness Limited in a deal that will see 100,000 farmers in dairy cooperatives access credit to finance fodder production, a critical barrier to the competitiveness of Kenya’s dairy sector. 

Through this partnership, the Bank has set aside KES 1 billion to facilitate industrial production of fodder by financing the fodder production activities namely; land preparation, planting, fertilization, weed control, harvesting, ensiling, baling and transportation, up to the point where the dairy farmer receives the fodder at the farm.

This is aimed at supporting the dairy farmers to have all-year-round access to good quality fodder that will enable them to double their milk production and consequently their income too. 

In addition to working capital financing to farmers, Family Bank will also finance enterprises involved in bulk procurement of dairy farming inputs and equipment. The capital expenditure includes expansion of cold chain, set up of farm infrastructure, upgrading of milk processing facilities and renewable energy at the milk processing plants, among others. The Bank will also provide working capital for milk processors to finance purchase, processing and storage of shelf-stable milk products such as milk powder during the flash season for sale during the dry season. 

“The importance of the dairy sector to Kenya’s economy cannot be underscored. The dairy sector, like any other sector, has also been affected by the COVID-19 pandemic, and as a result, we are experiencing low milk production in the country. This is why Family Bank in partnership with Performeter, an experienced player in the dairy sector, has set aside KES 1 billion as financing to enable farmers to access working capital and other financial services to support the dairy value chain and unlock its growth potential to the entrepreneurial dairy farmers,” said Family Bank Chief Executive Officer Rebecca Mbithi.  

“By working with dairy cooperatives, we believe that we can be able to target many small-scale entrepreneurs who contribute over 75% of Kenya’s total production and have an exponential growth effect of the sector in line with the President’s Big Four Agenda on food security,” she added. 

On her part, CashCow Project Chief Advisor and a seasoned Industrial Economist Moses Nyabila said “Transforming Kenya’s dairy sector will require a concerted effort by key actors. The government has ample land resources that can be mobilized into industrial forage and fodder production and that will be the game-changer. A strategic intervention on fodder is the surest way to rejuvenate our dairy industry and move towards a net exporter status on milk, and as a sector, we can do this.”  

Dairy farming remains a priority income-generating enterprise in more than 15 of 47 the counties in Kenya due to its potential to transform the economic well-being of the households involved in it. However, the earning potential from the dairy farming activities is greatly hindered by the seasonality of fodder and forage availability and the low nutritional quality of fodder fed to the cows