Farm loans in Kenya: Where the money goes

Agricultural financing in Kenya is predominantly consumed by the immediate requirements of the planting season, as farmers struggle to keep up with the rising costs of essential supplies.

Data from the Central Bank of Kenya’s March 2026 Agriculture Sector Survey reveals that an overwhelming 88 per cent of respondents utilise their credit to purchase farm inputs, including fertiliser, seeds, and pesticides. This heavy reliance on loans for basic consumables highlights a sector deeply vulnerable to price fluctuations in the global commodities market.

Beyond the physical materials needed for cultivation, human capital represents the second largest drain on agricultural capital.

Roughly 72 per cent of farmers report that loan proceeds are directed toward labour costs, indicating that the sector remains highly labour-intensive and dependent on seasonal hiring to maintain productivity.

While the majority of credit is tied to survival and maintenance, a smaller segment of the farming population is attempting to move toward long-term sustainability.

Approximately 32 per cent of respondents are using credit to fund the diversification of their agricultural activities, while 29 per cent are focused on the physical expansion of their farm holdings or land acquisition.