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Opinion: Market Access

Nat Robinson: Start-ups Transforming Smallholder Farmers’ Lives in Kenya

Nat Robinson Nat Robinson

Joseph Omwega is a 41 year-old farmer living in the Southern Nianza region of Kenya, Kisii. He belongs to the large community of smallholder farmers in the country estimated at 7.5 million individuals. Like him, the average smallholder farmer in Kenya owns 1-5 acres of land, produces for subsistence or sales in informal markets to earn USD 2-4 per day.

Despite his limited means, Joseph was determined to develop his plantation and searched tirelessly for a lender who would not ask for a land title deed or vehicle logbook as security for a loan. In 2014, he met us, at Juhudi Kilimo. A for-profit social enterprise serving rural smallholder farmers and small-to-medium agribusinesses throughout Kenya, we provide financing to help them acquire wealth-generating assets, such as high-yield dairy cows, poultry, irrigation equipment and farm machinery.

Joseph applied for a loan of 15,000 Kenyan shillings (USD$ 166) and leased two acres of land to plant more maize. With the additional sales, Joseph reinvested the money to increase his acreage and was able to settle his loan within 6 months. From then on, Joseph’s life has taken a turn for the better as his investments were able to get him enough money to pay up for additional loans, diversify his business, ensure his family’s wellbeing and pay for school fees for his children as well as save.

In Kenya, two thirds of rural farmers do not have access to adequate financial services necessary for them to grow and generate income, with the gap in financing reaching nearly USD $1 billion. Because they lack the collateral assets required for financing,small businesses based in agriculture are perceived as too risky by commercial and microfinance institutions as well as being simply too far away or too expensive in invest in.

That is why, at the end of 2013, Juhudi Labs was created. This entity is dedicated to finding, testing and scaling new products, technologies and processes to meet smallholder farmers’ demand for affordable new financial products and services. Kenyan smallholder farmers face many challenges and we have chosen to support local entrepreneurs who are tackling them through their own agribusiness products and services. To identify high-potential start-ups, we partnered with Village Capital on the Vilcap Kenya: Innovations in Agriculture program. Over a three month period, seven early-stage companies received training and mentorship during three workshops designed to give entrepreneurs both an insight into their own enterprises “through the lens of the investor,” as well as a focus on the customer through forums designed to accelerate customer validation.

At the end of the intensive program and rigorous ranking process, Juhudi Kilimo has partnered with three start-ups that we believe can truly transform the lives of Kenyan smallholders.


Futurepump produces solar-powered water pumps for irrigating small farms as an alternative to costly mechanical pumps.

Less than 2 per cent of Kenya’s agriculture is irrigated, making subsistence farmers especially vulnerable to drought. The only existing irrigation solutions made available to smallholder farmers are prohibitively expensive, typically costing them USD $2,800. Futurepump is solving this problem by introducing the Sunflower pump- a low-cost water pump designed to lift 13,000 litres of fresh water per day from underground reservoirs for irrigation purposes. The pump is both robust and portable and offers farmers a cheaper, cleaner and more sustainable alternative to costly and environmentally unfriendly diesel pumps.

Futurepump’s innovation has been very successful to date, especially among horticultural farmers such as Emmanuel Kioko who has experienced an important drop in production costs since he started using the Sunflower. We believe the Sunflower pump is a high potential product that is ready for the market.

Ojay Greene

In Kenya, 80 per cent of produce sold in supermarkets comes from only 5 per cent of the country’s growers. Rural small-scale farmers cannot compete with larger producers because they lack the capital to transport and market their produce to more lucrative urban markets. This limits smallholder farmers to supplying informal markets; they are often forced to sell their produce to local brokers, or in open-air markets and kiosks, where they are typically paid below-market prices.

Ojay Greene was formed to tackle this problem by aggregating the supply chain, selling local farmers’ produce to local urban supermarkets to increase market access and incomes by as much as 50 per cent. The company further addresses the huge deficit in basic skills among farmers by teaching them about food production and marketing. Training packages are also provided to help farmers adopt sustainable agricultural techniques that lead to better quality produce fit for urban supermarkets.

F3 Life 

Soil erosion is a major environmental challenge in Kenya, which creates annual losses of USD $390 million in agricultural exports.  This decline in food production leads to lower income levels reducing the capacity of farmers to invest in land quality improvements, increasing lending risk.

F3 Life links credit not only to interest and profit, but also to environmental sustainability.  When clients take a loan from F3 Life, the business helps them improve the management of their land in a way which: builds soil fertility for generations to come, protects watersheds, rivers and lakes from pollution by fertilisers and pesticides and removes harmful greenhouse gases from the atmosphere.

As farmers improve their land management, F3 Life rewards them with lower interest rates as well as higher credit limits. Clients also receive farming advice which helps them boost their crop yields and farm incomes.

Each of these three companies has successfully received investment from online financing network Kiva, and we at Juhudi Kilimo are excited to support them in the next stage of their business.


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