Financing Coffee Farmers in
Kenya: Challenges &
Opportunities
A presentation By John Amimo
Resource Mobilization Officer, Coffee Development Fund
During the FAST Executive Breakfast Meeting at BOMA HOTEL,
Nairobi, 30th July, 2012
Outline
• The Coffee Development Fund: Business Profile
• Coffee Outlook: An Overview
• The Financial Landscape of the Coffee Sector in
Kenya
• Risks & challenges in coffee sector financing
• Turning Risks into Opportunities
• Conclusion
Coffee Development Fund: Business Profile
BUSINESS
FINANCING COFFEE FARMERS
CLIENTS
SMALL HOLDER FARMERS/ESTATE
FARMERS/COOPERATIVE SOCIETIES
SERVICES/
MANDATE
PROVIDING ACCESSIBLE, AFFORDABLE
CREDIT AND FINANCIAL SOLUTIONS TO THE
COFFEE SECTOR
FUND SIZE
$USD 13 MILLION
IMPACT
68,245 COFFEE FARMERS
ELIGIBILITY
COFFEE FARMERS WITH A PRODUCTION
RANGE BETWEEN 0.5 - 3 KG OF
CHERRY/TREE
Coffee Outlook: An Overview
At Micro-Level
• Coffee production in Kenya has stagnated at around
40,000MT in the last 5 years
• Export earnings continue to rise despite a dip in
production.
In 2006/2007 season = Ksh 8.7 Billion received in Export earnings
In 2010/2011 season= Ksh. 22 Billion received in Export earnings
• Focus shifting from traditional coffee growing areas
(Central) to other non-traditional areas (Rift Valley)
• Local domestic consumption on the rise as evidenced by
number of coffee houses opening up in urban towns
Coffee Outlook: An Overview
At Macro-Level
• The past five years, global production has been rather
erratic compared to consumption which has been
increasing slowly but steadily
• Production interruptions mainly due to frost, leaf rust
and change of crop cycle among the world leading
producers
• Supply and demand interruptions attributed to the
continued volatility in coffee prices.
• Coffee farmers in producing countries continue to
experience ‘highs’ and ‘lows’ in pricing of their
produce
The Financial Landscape of the Coffee
Sector in Kenya
Risks & Challenges in Coffee Sector
Financing
Risks & Challenges in Coffee Sector
Financing (Continued)
Turning Risks into Opportunities
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A more holistic approach required in coffee sector
financing
Establishing relationships with farmers is key
Understanding farmers risks and challenges should be
the starting point.
Farmers respond better when financiers are able to
articulate and offer solutions that meet their needs
Strengthen capacity of staff in Agri-finance or
alternatively recruit staff with agricultural backgrounds
Develop mechanisms for knowledge management
within financial institutions
Conclusion
Food for thought
Devolved system of governance an
opportunity?
THANK YOU
FOR
LISTENING