NAIROBI, Kenya, Jan 6 – A majority of Kenyan farmers are increasingly sourcing loans from relatives and friends, leading to reduced uptake of credit from financial institutions, according to a new Central Bank of Kenya (CBK) report.
The latest CBK Market Perceptions Report on the agriculture sector shows that 25 percent of farmers relied on relatives and friends to finance farming activities in November last year, up sharply from six percent in September.
At the same time, access to digital loans improved, with 23 percent of farmers reporting use of digital credit in November, compared to 13 percent during the previous survey period.
“Despite a relatively smaller proportion reporting to have borrowed from banks and SACCOs in November 2025 relative to September 2025, they still remained the main sources of credit reported by farmers in the September and November 2025 surveys,” the report notes.
The growing reliance on friends and relatives comes amid high borrowing costs, with many lenders charging interest rates above 10 percent, making formal credit less attractive to farmers.
To stimulate lending and revive economic activity, the CBK last month cut the Central Bank Rate (CBR) by 25 basis points to 9 percent.
“The sustained monetary policy easing by the CBK has resulted in relatively lower lending rates, and this may explain the uptick in borrowing from banks and SACCOs,” the report adds.
