The government on Tuesday signed KES 600 million loan agreements with four Deposit Taking Microfinance institutions (DTMs). The funds given to the Kenyan government by the International Fund for Agricultural Development (IFAD) are intended to reduce poverty in rural areas by making available credit facilities at competitive interest rates.

The four institutions Kenya Women Finance Trust (KWFT), Faulu Kenya, SMEP and Rafiki will spearhead the implementation of the Programme for Rural Outreach of Financial Innovations and Technologies (PROFIT) Credit Facility that has been extended to the Kenya Government by IFAD.

"There are many Kenyans in the rural areas running productive and profitable businesses within the agricultural value chain sector, but are left out by the mainstream financial sectors." Said Finance PS Joseph Kinyua, and added, "Thanks to the microfinance institutions, such enterprising men and women can access financial services to support their business enterprises."

Small scale farmers are targeted in an effort to increase and improve the efficiency of food production resulting in greater food security, employment creation and a rise in living standards among the rural population.

Kinyua explained that PROFIT has three components of which Credit Facility KES 637.5 million ($7.5m) is one of the sub-components. He said the main objective of the Credit Facility is to address the short-term capital constraints of DTMs to
enable them deepen their rural outreach, facilitate expansion of a range of financial services, and encourage the use of innovative financial products and technologies.

KWFT received the largest share of the kitty getting KES 205 million followed by Faulu Kenya which received KES 200 million. SMEP and Rafiki receiving KES 100 million and KES 94 million respectively.