Presentation Fin4Ag S24 by Ernest Chitechi

1. FIN 4 AG Conference

2. • World Bank-infoDev initiative, funded by UK Aid and DANIDA
• Provides incubation, capacity building services and financing to
SMEs developing climate mitigation/adaptation solutions
• Operational since September 2012, the first among the CICs that
infoDev is launching globally
• GVEP International, PwC, Strathmore University and KIRDI are the
lead partners in a consortium contracted by infoDev to establish and
operate the KCIC. Actual implementation is done works with many
supporting partners and collaborators.
• Currently in the process of incorporation as a Company Limited by
Guarantee to strengthen sustainability of its operations.
2
What is the KCIC?

3. Why Agricultural Financing
• Food Insecurity - Kenya
produces 75% of maize, 30%
wheat and about 25% of rice
needs
• Starvation and malnutrition
• Huge income inequalities
• High unemployment levels
• High incidences of Poverty
• Poorly developed value chains
3
Agriculture is the key economic activity in Kenya contributing
80% of formal employment and 26% to the GDP

4. Lack of
coherence
food policy
or Strategy
Low crop
productivity
Dependency on
Rain fed
agriculture
Uncoordinated
marketing
High,
inaccessible
,low quality
yield enhancing
inputs
Limited
access to
Agricultural
finance
4
Challenges in Agriculture
…leads to low productivity

5. The Missing Link
The smallholder farmers have many needs including:
• Current accurate Market Information
• Convenient Access to Inputs – Raw material, feed stock, seeds,
feeds, fertilizers, crop protection, veterinary health - & FINANCE
• Knowledge re Tools, & Training – beyond the obvious
• Infrastructure - post harvest storage, warehousing, distribution
network
• Supportive legal and administrative structures – help not
impediment
• Better Linkages to Markets & Local Value Add industries
5
DAUNTING LIST – WHERE TO BEGIN?

6. Why Limited Funding by Commercial
Entities
• High Interest rates
• Real and Perceived risk exposure – production and marketing risk
• Effects of climate change
• Mistrust in contracting farming
– High transactions
– Poorly enforced
– Lack of Trusts in contracts (Side selling )
– Limited Risk sharing mechanisms
• Limited support services
– Proper book keeping
– Non accompanying technical advice
• Lack of bundles services
• No Agricultural Insurance services
• Lack of Market linkages
• Unpredicted policy environment
• History of loan write off

7. KCIC Model
• Providing risk capital through
a highly flexible fund that
offers financing through two
windows, namely proof of
concept and seed financing
• Facilitating other sources of
financing through
syndicating investors,
building partnerships with
banks to facilitate working
capital finance and
facilitating consumer
financing to ensure
technology adoption in the
market

8. Key success cases
8
MilestonesMineral & Allied
SunCulture
Over the last 12 months, Animal Mineral & Allied Ltd
had grown from a small Agro-vet shop that provides
livestock inputs to farmers around Wangige Shopping
Center to a major provider of hydroponics technology
in the Country. It has opened over 15 outlets/contact
points and installed 285 hydroponic units across the
Country. The business has also grown its sales by
240%. The CIC support were mainly directed at
growing market awareness , development of effective
farmer outreach models and training materials. The
business has also been assisted to patent the
appropriate aspects of its technology.
SunCulture is providing low-cost and efficient irrigation
technology targeting smallholder growers of high-value
crops in the country. The business has sold 32 irrigation
in the last 6 months when it entered the market. The
customers are further provided with extension support
and linkage to competitive markets for their crops. The
Company is currently embarked on a robust market
expansion plan within Kenya and possibly Uganda over
the next 5 years. The main CIC support has been in
areas end-user financing through which the Company
has successfully entered into partnership with Equity
Bank. Additional support has been provided in setting up
the Company’s financial management systems.