Family Bank has a KSh 20 Million loan facility from the Financial Sector Deepening(FSD) for onward lending to dairy cooperative societies firms as well as suppliers of farm inputs.
Using this credit facility, Family Bank intends to increase its lending to the dairy industry and assist farmers to deal with any emerging challenges. The lender expects to increase its capital strength to support the dairy sector through favourable credit terms that favour mostly small-scale dairy farmers.
This two-year credit guarantee facility will enable borrowers to buy fodder, concentrates, minerals, artificial insemination services, and propagation of feeds among other dairy industry inputs.
Family Bank has created this additional facility following an earlier one where it had set aside KSh 1 billion, in partnership with Performeter, to assist to enable Ndumberi Dairy Farmers Co-operative Society access quality fodder for a thousand dairy farmers.
According to Rebecca Mbithi, CEO of Family Bank, Kenya’s growing dairy sector value can create employment and significantly grow the economy.
“However, this sub-sector has been severely it by long drought spells coupled with costly animal feed that has, in turn, affected milk production in the country,” said Mrs Mbithi.
Family Bank has grown a formidable retail customer base with special interests in SME banking. It is also the fifth-largest bank in Kenya, in terms of branch network with 93 branches across 32 counties. It has more than 600,000 customers, 4,800 bank agents, and over 8,000 merchants countrywide with a balance sheet size worth more than KSh 128 billion as well as deposits above KSh 88 billion.
According to the Kenya Economic Survey 2023, the quantity of recorded milk declined by 5.9% to 754.3 million litres in 2022.
Similarly, the quantity of processed milk and cream reduced from 510.6 million litres in 2021 to 466.0 million litres in 2022.
Production of butter and ghee; and cheese declined by 28.9% and 41.2% from 1,043.2 tonnes and 158.4 tonnes in 2021 to 742.0 tonnes and 93.2 tonnes in 2022, respectively.
The quantity of manufactured food products registered a decelerated growth of 1.1 per cent in 2022 compared to a growth of 3.0 per cent in 2021.
This was mainly on account of reduced production recorded in the food sub-sectors as a result of drought experienced during the year which affected the supply of raw materials for most agro-based industries.
The sub-sectors that recorded production decreases were Animal and Vegetable Fats and Oils; Dairy products; Grain Mill products; and Prepared Animal Feeds. On the other hand, Processing and Preserving of Fish; Meat and Meat
Prepared and preserved fruits and vegetables; and production of sugar registered an increase in quantities produced in the year under review. The dairy production sub-sectors contracted by 8.4 in 2022. This decrease was mainly due to a decline in the production of processed milk from 509.0 million litres in 2021 to 463.9 million litres in 2022 Available figures indicate Kenya’s Dairy sector contributes 14% of its GDP with milk from small-scale dairy farmers contributing 56% of the sub-sector’s entire output.
