Credit Factory: Financial Inclusion For Rural Smallholder Farmers

Credit Factory: Financial Inclusion For Rural Smallholder Farmers

Thomas Otengo is an all-weather farmer. In the past, Otengo worked temporary jobs as a construction worker and sporadically tilled his land for subsistence. Today, the 49-year-old has embraced full-time commercial farming and no longer depends on perfect climatic conditions to get busy on his farm.
Otengo’s transformation began when he joined a group of like-minded farmers and got a low-interest loan from the Credit Factory to acquire all the farm inputs and equipment he needed to make his venture a success. With the loan, he and his group of smallholder farmers acquired high quality seeds, fertilizer, pesticides, and pipes for irrigation.
With superior inputs, Otengo’s crop yields have increased significantly. Having a constant water supply has also enabled Otengo to farm all year round and has enhanced his ability to provide for his family of nine. During the drier seasons, Otengo’s green shambas contrast sharply with the bare landscape around them as most of the farming activities in his locality are predominantly rain-fed. This is also his most lucrative season as he is always among very few farmers who can supply vegetables, tomatoes and potatoes to meet the high demand from traders from Migori and neighboring counties.
Otengo’s success through access to affordable finance is being replicated by hundreds of smallholder farmer groups working in various agricultural value chains in western Kenya.
“Credit Factory loans are unique because they are affordable and they match the needs of smallholder farmers like me,” says Otengo. “I am happy because my family is now comfortable and my energies are focused on something that’s truly profitable,” he shares.
Credit Factory is a Kenyan company created through FIRM’s technical support to pioneer an innovative approach to microfinance and to make lending truly affordable and available to the masses. The company is founded on the belief that the prevalent high interest rates in Kenya significantly limit financial access and widen the inequality gap. By leveraging technology, the Credit Factory will lower the cost of finance and will commoditize and customize credit for ordinary Kenyans for specific agriculture value chains based on farmer needs, production cycles and repayment capacities.
USAID FIRM’s partnership with the Credit Factory is centered on smallholder farmers, most of whom have never received a loan. The innovation will help to economically empower smallholder farmers and will enhance financial inclusion among rural communities.



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