KCB increases agricultural lending by 50% to Ksh.75B amid climate resilience push

The financing, up from Ksh.50.6 billion in 2024, underscores the bank's growing exposure to agriculture at a time when erratic weather patterns, rising production costs and disruptions to global supply chains continue to threaten farmers and food production across the region.

The lender is also expanding its sustainable finance portfolio, with green loans accounting for 25.8 per cent of its total loan book in 2025, surpassing its initial target of 25 per cent.

According to the group's latest financial disclosures, KCB disbursed Ksh.53.2 billion in green financing in 2024, followed by an additional Ksh.48.8 billion in 2025.

The funds went towards renewable energy, climate-smart agriculture and clean transport, among other sectors.

The increased agricultural financing comes as Kenya seeks to mobilise more than Ksh.1 trillion over five years under the National Agri-food Systems Investment Plan (NASIP), a government-led initiative aimed at improving productivity, strengthening food security and expanding agro-industrialisation.

The plan brings together public funding, private sector investment and development partner support, with priority areas including agro-processing, agricultural research, irrigation and access to finance.

Of the targeted investment, Ksh.265 billion is earmarked for agro-industrialisation and value addition, while Ksh.191 billion will go towards expanding agricultural financing.

Another Ksh.111 billion is allocated to research, data and innovation, while Ksh.190 billion is expected to support medium and large-scale production and irrigation.

The government intends to use blended financing to attract private capital into agriculture by reducing investment risks and addressing barriers that have traditionally discouraged commercial lenders from financing the sector.

The financing drive comes against a backdrop of slowing agricultural growth, with Kenya's real agricultural growth rate declining to 2.8 per cent in 2025 from 4.3 per cent in 2024 and 7.1 per cent in 2023.

The Kenya National Bureau of Statistics attributed the slowdown largely to adverse weather conditions, warning that the sector had recorded a second consecutive year of decelerating growth.

In its latest Economic Survey, KNBS noted that although agriculture continued to expand in real terms, the slower growth in gross value added reflected the impact of unfavourable weather during the review period.

Against this backdrop, financial institutions are increasingly being called upon to support not only farmers but also businesses involved in supplying agricultural inputs, processing produce and facilitating domestic and international trade.

KCB has extended financing to several companies operating across these segments, including fertiliser suppliers, tea processors and dairy producers.

The bank provided Ksh.2 billion to support fertiliser imports under the government's fertiliser subsidy programme and a separate Ksh.4.5 billion facility to Itracom Fertilizer Limited, which manufactures and distributes organic fertiliser across the region.

It also extended Ksh.34 billion in working capital and trade finance to the Kenya Tea Development Agency (KTDA) and Chai Trading Company to support operations within the tea value chain.

In the dairy industry, the lender provides financing to producers including Brookside, Githunguri Dairy, Meru Dairy and Mukurweini Wakulima Dairy. It also extended a Ksh.514 million facility to Meru Maziwa Millers.

The bank is now seeking to expand its sustainable financing capacity through a newly launched green, blue, social and sustainability bond framework targeting Ksh.300 billion in fundraising over the next five years.

Part of the proceeds will be directed towards agricultural projects focusing on efficient water and input use, climate-resilient crop production and reducing post-harvest losses.

The framework is expected to provide additional financing for businesses and projects seeking to strengthen agricultural productivity while reducing their exposure to environmental risks.

The increased lending reflects a broader shift in agricultural financing, with attention moving towards supporting entire value chains rather than relying solely on direct credit to farmers.

For Kenya, where agriculture remains a major source of employment and household income, expanding access to long-term financing will be critical in addressing productivity challenges, improving food security and cushioning farmers against increasingly unpredictable weather patterns.