NAIROBI, Kenya – Kenyan farmers are increasingly turning away from the Hustler Fund and microfinance banks in favour of commercial banks and digital lenders, according to a new Central Bank of Kenya (CBK) survey.
The survey, conducted between March and May 2025, shows that 11 percent of farmers who had borrowed from the Hustler Fund and 13 percent who relied on microfinance banks had abandoned these credit options by May.
Instead, commercial banks recorded a sharp rise in uptake, with the proportion of farmers borrowing from them climbing from 41 percent in March to 58 percent in May.
Digital loans—including Fuliza and KCB M-Pesa—also gained traction, rising from two percent to eight percent in the same period.
Other growing sources of credit included buyers of farm produce, which increased from 11 to 16 percent, and informal savings groups, which also rose from 9 to 16 percent.
In contrast, borrowing from savings and credit cooperative societies (SACCOs) dropped significantly, from 35 percent to 24 percent.
“The main sources of credit to farmers are banks, SACCOs, family and friends, buyers of farm produce, and digital credit providers,” the report notes, pointing to shifting borrowing patterns among farmers.
The survey further reveals changing priorities in how farmers use their loans.
While financing for farm inputs such as fertiliser, seeds, and pesticides declined from 94 percent in March to 84 percent in May, borrowing for machinery and equipment jumped from 25 percent to 41 percent. Loans for labour costs also fell slightly, from 62 to 57 percent.
The Hustler Fund, a flagship programme of President William Ruto’s administration designed to expand financial access for low-income Kenyans, appears to be losing ground among farmers.
Analysts attribute the shift to lower interest rates offered by banks and the convenience of digital credit.
By July, overall credit access among farmers had risen to 41 per cent, up from 34 per cent in May, largely driven by digital lenders and support from family and friends.
Despite shifting credit sources, most farmers (83 per cent) still use loans for farm inputs, with many expressing optimism about expanding acreage and improving yields.
The CBK survey, which covered 284 farmers across major agricultural regions, also captured policy suggestions to boost productivity.
These include scaling up irrigation projects, sustaining fertiliser subsidies, stabilising crop prices through increased support to the National Cereals and Produce Board, and improving feeder roads to curb post-harvest losses.
