By Kepher Otieno - Reporter
Kenya, 11 June 2026 - Siaya County Executive Committee Member (CECM) for Agriculture Willis Okoth has called for a review of interest rates charged under the Rural Kenya Financial Inclusion Facility (RK-FINFA), warning that high borrowing costs could discourage farmers from embracing the programme and undermine efforts to transform agriculture into a commercially viable enterprise.
Speaking during a stakeholders' meeting at Siaya National Polytechnic, Okoth argued that many of the targeted beneficiaries are smallholder farmers who have previously relied on grant-funded agricultural programmes and may struggle to adapt to commercial loans carrying significant interest obligations.
"We are dealing with farmers who are financially challenged and to me the loan interest rates are high. It is good if the rates are reviewed for the sake of our farmers," said Okoth.
The county agriculture chief noted that many of the farmers earmarked for RK-FINFA support previously benefited from grants under the Aquaculture Business Development Programme (ABDP), the National Agricultural Value Chain Development Project (NAVCDP), and the Kenya Livestock Commercialization Project (KeLCoP).
According to Okoth, shifting such farmers directly from grant-based support to commercial credit could prove difficult unless financing terms are made more attractive.
He warned that expensive loans could dampen enthusiasm among farmers seeking to expand agribusiness ventures and improve productivity.
"Though our partners financing the programme will be making profits out of it, our people will be struggling to pay the debts. We might not meet the intended objective of the programme if we insist on the high-interest loans," he said.
The concerns highlight a growing debate within Kenya's agricultural sector over how to strike a balance between financial sustainability and affordable access to capital for rural producers.
Responding to the concerns, IFAD Country Programme Coordinator Ronald Ajengo acknowledged that the issue of borrowing costs was legitimate and deserved consideration.
"Mr Okoth has raised a valid concern on cost implications targeting farmers and we will see how to address it," said Ajengo.
However, Ajengo emphasised that RK-FINFA differs fundamentally from traditional agricultural support projects because it is designed as a financial sector intervention rather than a grant programme.
The facility works through commercial banks, Savings and Credit Cooperative Organisations (SACCOs), and microfinance institutions to provide tailored financial services to rural communities.
Ajengo urged Technical Service Providers (TSPs) to educate farmers on the benefits of commercial financing and help them appreciate the role of credit in expanding profitable agricultural enterprises.
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"As Technical Service Providers, we have to convince farmers to change their mentality and embrace loans to facilitate expansion of their value chains and agribusinesses," he said.
The programme's architects argue that sustainable agricultural transformation can only be achieved when farmers graduate from dependence on grants to market-driven financing systems capable of supporting long-term growth.
Jonathan Agwe, Rural East and Southern Region Lead Technical Specialist, said farmers operating profitable and structured value chains stand to benefit most from commercial financing.
"You will see farmers stepping out of grants willingly to interest-bearing financial products because such products are not limited and provide greater opportunities for expansion," Agwe said.
He stressed that farmers must develop bankable business models backed by reliable markets and off-takers before taking commercial loans.
Drawing from experiences across more than 20 countries, Agwe noted that financial institutions are increasingly willing to lend to farmers participating in organised and structured value chains where risks are lower and returns more predictable.
Experts say the success of RK-FINFA will ultimately depend on whether farmers can generate sufficient returns across the agricultural value chain—from input supply and production to transportation, processing and retailing—to comfortably service commercial loans while maintaining profitability.
For now, however, county leaders insist that unless borrowing costs are reviewed, many rural farmers could remain hesitant to embrace the programme, potentially slowing efforts to deepen financial inclusion and modernise agricultural production in Kenya's rural economy.
This version presents the issue as a balanced business and policy analysis while highlighting the tension between affordable credit and commercial agricultural financing.
Calls Grow for Review of RK-FINFA Loan Rates as Siaya Farmers Brace for Commercial Financing
Siaya CECM for Agriculture warns expensive loans could dampen enthusiasm among farmers seeking to expand agribusiness.