Kenyan commercial banks are shifting their lending strategies from traditional primary production toward value addition, aiming to plug local small and medium-sized enterprises into global supply chains.
Equity Bank is leading the pivot, accelerating efforts to transition grassroots businesses from raw material producers into competitive players in the global market. The push was the focal point of a recent high-level business dinner between the bank’s executive leadership, the Narok County Government and the local business community. Narok, once anchored on the Maasai Mara National Reserve and rain-fed wheat farming, is emerging as a commercial hub and a blueprint for the new wave of local enterprise development.
Equity Bank Managing Director Moses Nyabanda said the focus must shift toward “smart agriculture” and market linkages to unlock the value of local enterprises. “We are seeing farmers adopting smart agriculture, moving away from how our forefathers farmed,” he said. “But we do not just want to increase yields; we want to connect you to the market. If you are a livestock farmer, we want to see how we can link you to markets that buy processed leather for designer bags, rather than selling raw hides for a fraction of the price.”
To de-risk the agricultural sector, which remains sensitive to weather patterns, Nyabanda committed to aligning loan disbursement timelines with local crop cycles, assuring farmers of a two-week turnaround for agricultural credit to avoid missed planting seasons.
Equity Bank Commercial Director Kagiso Moloi said the bank’s targeted capital deployment was being driven by rapid, multi-sectoral economic expansion in regions outside traditional urban centres. “Narok is not a small market to us. Livestock business is growing, trade is growing, and tourism is growing. People in Nairobi may not realise how fast this region is expanding. Our job is to fund that growth and move money quickly and safely,” Moloi said.
To build capacity for global export, the lender is deploying aggressive asset finance and unsecured credit lines to stimulate local enterprise. Equity Bank Kenya’s Head of Retail and Branch Business, Carol Rutto, said the bank offers up to 105 percent financing for tractors and commercial trucks, and unsecured loans of up to Sh10 million without collateral.
Access to credit in agrarian regions was historically stifled by stringent collateral requirements that locked many out of the commercial supply chain. Okipira Ole Tutai, a farmer who began his agribusiness journey in 1985, recalled how state-backed agricultural financiers demanded title deeds, which were a near impossibility for young farmers in communally held land systems. He said he went without a loan from 1985 to 1994 for lack of one, before the entry of flexible, cash-flow-based lending allowed him to scale from subsistence to commercial operations, eventually acquiring tractors and commercial real estate.
Flexible lending has also helped insulate SMEs from macroeconomic shocks. Education investors in the region said loan moratoriums were critical in preventing the mass closure of private educational institutions during the Covid-19 pandemic, with repayments put on hold until the economic environment stabilised, allowing institutions to survive the crisis and later leverage bank financing to acquire land and build infrastructure.
As credit uptake increases, so has the conversation around loan recovery, a sensitive issue in Kenya’s banking sector amid rising non-performing loans. Narok County Executive Committee Member for Finance David Ole Muntet urged financial institutions to adopt more humane default management strategies. “Borrowing is a wedding, but paying back can feel like a funeral,” Muntet said, urging banks to find better approaches to handling defaulters rather than immediately auctioning properties.
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