Agricultural Finance in Kenya: How Farmers Are Getting Credit Without Collateral

The current landscape#

Agricultural credit is the most transformative input a Kenyan farmer can access — not because it substitutes for good farming practice, but because it unlocks the ability to buy certified inputs at planting time rather than at harvest income, to store grain for better prices rather than selling at the lowest point of the season, and to invest in productivity improvements that pay back within one growing cycle. The long-standing problem has been that conventional banks require land title deeds as collateral — an asset that fewer than 30% of Kenyan smallholders possess. This structural barrier is being dismantled from multiple directions simultaneously, creating a genuine inflection point in agricultural finance access for Kenya's farming communities.

Market dynamics and opportunity#

The most widely accessed agricultural credit product in Kenya is the digital lending product — particularly the agricultural-specific loans offered by Apollo Agriculture, iProcure, and One Acre Fund. These organisations use a combination of mobile phone data, satellite field analysis, and repayment history to assess creditworthiness without requiring physical collateral. Apollo Agriculture's model is instructive: the company uses satellite imagery to assess field size and crop health, combines this with M-Pesa transaction data to assess financial behaviour, and delivers inputs (certified seed, fertiliser, crop insurance) directly to the farmer on credit — with repayment due after harvest. The interest rate is 15-18% on a seasonal basis, comparable to commercial bank rates but without the collateral requirement or the physical application process. In 2025, Apollo served 850,000 farmers across Kenya with an average loan of KSh 8,500.

Strategic implications for businesses#

For farmers with grain inventory ready to sell but seeking to hold for better prices, warehouse receipt financing is the most cost-effective option. The Kenya Warehouse Receipting System (KWRS), operated by the Ministry of Agriculture in partnership with licensed warehouses, allows farmers to deposit certified grain (maize, sorghum, beans, wheat) and receive a receipt that is accepted as collateral by seven participating banks. A farmer with 5 tonnes of maize in a licensed warehouse can access 60-70% of the current market value as a bank loan within 48 hours, then sell the grain when prices rise and repay the loan — keeping the price difference as profit. Interest rates on warehouse receipt loans are 12-14% annually, and the system eliminates the storage risk and post-harvest loss associated with on-farm grain storage. For organised farmer groups and cooperatives, KWRS financing combined with bulk input purchasing provides a complete working capital solution.

Before and after scenario#

A potato farmer in Meru needs KSh 35,000 for certified seed and fertiliser to plant 2 acres, but does not have the funds at planting time — so she plants recycled seed and foregoes fertiliser, yielding 4 tonnes instead of the 9 tonnes she could achieve with proper inputs. After joining a One Acre Fund membership group, she receives certified seed and fertiliser on input credit at planting time, repays after harvest, and consistently produces 9 tonnes from the same 2 acres — tripling her income from the same land.

2026 market pulse#

Apollo Agriculture served 850,000 Kenyan farmers with input credit in 2025, reporting a 96% loan repayment rate and an average yield increase of 26% among borrowers — demonstrating that properly structured agricultural credit is both commercially viable and developmentally impactful.