- CS Oparanya has urged financial institutions to design products around the realities of farming, recognizing alternative forms of security while aligning repayment schedules with production cycles.
The government has moved to place cooperative societies at the centre of its plan to widen smallholder farmers’ access to affordable credit and speed up the transformation of Kenya’s food systems.
In remarks delivered on his behalf by Principal Secretary Susan Mang’eni during the Financing Agri‑Food Systems Sustainably (FINAS) summit, Cabinet Secretary for Cooperatives and MSMEs Dr. Wycliffe Oparanya said cooperatives remain the most effective model for enabling smallholder farmers to access credit, markets, technology, and extension services.
Oparanya noted that many farmers are locked out of formal credit because conventional lenders demand land titles, regular incomes, and extensive credit histories that smallholders often lack. He urged financial institutions to design products around the realities of farming, recognizing alternative forms of security such as warehouse receipts, buyer contracts, produce, movable assets, and group guarantees, while aligning repayment schedules with production cycles.
He explained that cooperatives allow farmers to aggregate produce, purchase inputs collectively, invest in value addition, and negotiate better prices, while reducing the cost of delivering financial and insurance services.
SACCOs, he added, complement these efforts by mobilizing savings and extending affordable loans to members who may not qualify for conventional bank credit.
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However, Oparanya stressed that expanding agricultural finance must be accompanied by sound governance and stronger regulation to safeguard members’ deposits. “My ministry is implementing reforms aimed at strengthening governance, improving supervision, enhancing liquidity management, and protecting members’ deposits. Strong regulation is the foundation of confidence and will attract more investment into the cooperative sector,” he said.
Oparanya also highlighted ongoing reforms to revive the coffee sector, placing cooperatives at the centre of production, processing, value addition, and marketing. He observed that poor returns had previously driven many farmers to abandon coffee for real estate ventures, underscoring the need to make agriculture more profitable. “Our objective is not just to increase coffee production but to ensure farmers receive fair returns from the value chain,” he said.
Oparanya stated that similar integrated approaches would be extended to other value chains including dairy, livestock, cereals, horticulture, and fisheries, as part of a broader push to strengthen agricultural returns across the board.
Oparanya said the government would continue supporting entrepreneurs through institutions such as the Kenya Industrial Estate, Agricultural Finance Corporation, Kenya Development Corporation, Youth Enterprise Development Fund, Women Enterprise Fund, and other financing agencies.
He called on financial institutions and the private sector to translate commitments made during the summit into practical investments that improve farmers’ livelihoods. He also urged the FINAS Secretariat and its partners to establish a robust monitoring mechanism to track implementation of commitments, investments, and partnerships. “The next engagement should begin with an honest account of what has been implemented, the impact achieved, and the work that remains outstanding,” Oparanya said.
By Masaki Enock
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