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Mastercard, Co-operative Bank Partner To Boost Small Farmers

Empowering Small Holder Farmers with Below-Market Interest Loans: Mastercard and Co-operative Bank of Kenya Collaborate

Addressing Credit Challenges for Small-Scale Farmers

Small-scale farmers, constituting over 70% of Kenya’s agricultural production, often encounter difficulties accessing credit from financial institutions.

Empowering Small Holder Farmers with Below-Market Interest Loans: Mastercard and Co-operative Bank of Kenya Collaborate
Co-operative bank of Kenya’s MoU with Mastercard to loan small farmers below market rate: Photo source (KBF)

In a strategic move, Mastercard and Co-operative Bank of Kenya have collaborated to provide loans with interest rates below the market price, specifically tailored for smallholder farmers.

Driving Digital and Financial Inclusion Across East Africa

This partnership is one of three collaborations. It aims to bring substantial changes in digital and financial inclusion for smallholder farmers and rural communities in East Africa.

The announcement happened during the Community Pass Customer Summit in Kampala, Uganda.

The summit brought together over 90 public and private sector partners.

They are committed to crafting sustainable solutions for digital and financial inclusion.

A Holistic Approach: Collaboration with Shell Foundation

Mastercard collaborates with Shell Foundation and Co-operative Bank of Kenya.

The commitment is to provide below-market interest rates to smallholder farmers.

The focus is on lending for green technology.

Tara Nathan, Founder of Mastercard Community Pass, is excited.

The joint dedication aims to enhance digital and financial access. It specifically addresses the unique needs of users.

Overcoming Traditional Lending Challenges for Smallholders

Traditional lenders struggle to provide credit to smallholders.

Challenges include increasing central bank interest rates, weather-related risks, and high administrative costs for managing small-scale loans.

Mastercard’s solution addresses these challenges.

It facilitates digital access for rural and marginalized communities to offline services, even without digitized data records, identification documentation, or connectivity.

Community Pass: A Globally Expanding Platform

Community Pass, the platform facilitating this collaboration, has already reached nearly five million users globally in countries including Uganda, Kenya, Tanzania, Ethiopia, and India. It provides a commercially sustainable approach to scaling service delivery, increasing access to critical services such as agriculture, healthcare, and micro-commerce.

Fostering Sustainable Development in Kenya’s Agricultural Industry

Daniel Huba, Vice President for Sub-Saharan Africa at Mastercard, highlighted the importance of improving farmers’ access to finance.

This is crucial for increasing agricultural productivity, reducing poverty, and promoting sustainable development in Kenya.

Initiatives connecting smallholder farmers with banks and financial institutions are underway.

The goal is to enable farmers to access credit, purchase agricultural inputs, and enhance their yields.

Building on Success: Co-op Bank Soko Platform

This recent announcement builds on a prior partnership between Mastercard and Co-operative Bank of Kenya, which introduced an online platform facilitating local farmers’ timely access to farm inputs at the beginning of the planting season.

The Co-op Bank Soko platform, since its inception, has seen substantial participation, making a significant impact on the development of the agricultural industry in Kenya.