Faulu, GIZ Target Smallholder Farmers with Green Financing

Faulu Microfinance Bank now offers green financing to smallholder farmers in the dairy and horticulture value chains.

This comes after the signing of a partnership with the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) as part of its sustainable energy for smallholder farmers project in Ethiopia, Kenya, and Uganda.

A total of Sh120 million would be first distributed to 400 individuals in at least six counties: Kirinyaga, Meru, Muranga, Nakuru, Machakos, and Makueni, with investment areas including solar-powered irrigation, cooling, and drying, among other solar technologies.

“Because of this project, we will support smallholder farmers in accessing and using solar energy to improve their livelihoods and increase their resilience to climate change,” Faulu Chief Executive Officer Julius Ouma said.

“We also hope that our support will increase their productivity and economic competitiveness,” Ouma added.

The microfinance firm will analyse the financing needs of smallholder farmers for solar-powered appliances and equipment and produce appropriate financial solutions as part of the program, which will be implemented in four phases.

In addition, the lender will select credible distribution partners for the appropriate solutions, as well as increase capacity for both personnel and potential consumers.

Most smallholder farmers currently utilise petrol or diesel engines to pump water for irrigation or animal watering.

These are costly to operate, maintain, and emit greenhouse gases (GHGs) into the environment.

“Through the provision of green financing solutions, this partnership will unlock access to modern renewable energy technologies and climate-smart practices that improve farmers’ livelihoods, greenhouse gas emissions are reduced and their farming activities become resilient to climate change,” Valerie Ostheimer, Project Leader at GIZ-EnDev Kenya, said.