Micro Enterprises Support Programme Trust Facilitating Access to Finance

Micro Enterprises Support Programme Trust Facilitating Access to Finance

Micro Enterprises Support Programme Trust (MESPT) plays a crucial role in enhancing financial access for smallholder farmers, particularly in Kenya. Our experience in wholesale lending dates to 2002. MESPT’s primary objective is to promote sustainable livelihoods by supporting agricultural and microenterprise development. We provide sustainable access to finance and business development services to MSMEs and financial institutions. Our financial solutions and services are geared towards increased financial inclusion, enhanced productivity, accelerated development & growth of MSMEs for job and employment creation. Major focus sectors include agriculture, climate-smart/ renewable energy, and general enterprises aligned with MESPT’s mission and goals.

Here’s how we contribute to improving financial access for small-holder farmers:

Facilitating Access to Credit and Financial Services. MESPT works with financial service providers, Farmer Cooperatives and Small Medium Enterprises (SMEs) in Kenya  to increase access to financial services for smallholder farmers. The organization facilitates the development of financial products specifically tailored to the needs small holder farmers, aggregators, agri business service providers and green technologies service providers among others. These products often come with low interest rates, flexible repayment schedules, and microfinance options that are more accessible compared to traditional banking. MESPT helps smallholder farmers access credit, which allows them to invest in inputs, equipment, and technologies that improve productivity and profitability.

The MESPT board and management team with the management and board of Solution Sacco.

Capacity Building and Financial Literacy. Many smallholder farmers face challenges in managing finances effectively due to a lack of financial literacy. MESPT addresses this by offering training programs that enhance farmers’ understanding of financial management and farming as a business. These include savings and investment training, budgeting and cash flow management,  improved record-keeping practices and understanding cost benefit analysis of their farming enterprise. By equipping farmers with these skills, MESPT enables them to make informed financial decisions, leading to better access to formal financial products and services.

Linking Farmers to Financial Institutions. MESPT serves as an intermediary, connecting smallholder farmers with banks, microfinance institutions, and other financial service providers. This includes facilitating the creation of financial products designed to meet farmers’ unique needs, such as loans for purchasing seeds, fertilizer, and equipment. MESPT also helps farmers access crop insurance, which provides financial security against natural disasters or poor harvests.

Promoting Inclusive Financing Models. MESPT encourages group lending models and cooperatives, where smallholder farmers can pool resources to access larger amounts of credit. These models increase the farmers’ ability to access funds they would otherwise be unable to secure individually. MESPT’s support in organizing these groups ensures that farmers have a stronger negotiating position with financial institutions.

Nancy Lita Murithi from Githongo, Imenti Central farmer accessing credit from Times U DT Sacco 

Supporting Agricultural Value Chains. MESPT also promotes access to finance through its focus on agricultural value chains. By supporting farmers’ entry into well-established agricultural value chains, the organization helps create reliable revenue streams. This support, in turn, enhances the farmers’ creditworthiness, making it easier to access loans and financial services.

Roy Wafula, Founding Director Shammah Agribiz beneficiary of MESPT’s credit facility

Linking Farmers to Markets and Investment Opportunities. Beyond facilitating access to financial services, MESPT also helps farmers connect with markets for their produce. By ensuring that smallholders have reliable market access, MESPT helps increase their income and financial stability. With a steady cash flow, farmers are better positioned to repay loans and reinvest in their operations, leading to sustainable growth.

Promoting Climate-Resilient Financial Products. In the face of climate change, MESPT has supported the development of climate-resilient financial products. For example, we have worked with financial institutions to develop insurance products that cater to weather-related risks. This allows farmers to manage climate-related risks more effectively, improving their financial access.

In conclusion, MESPT’s role in enhancing financial access for smallholder farmers is multifaceted, involving facilitating access to tailored financial products, improving financial literacy, and creating opportunities for farmers to participate in formal financial systems. By combining these elements, MESPT helps empower smallholder farmers, women and young people thus enabling them to increase productivity, reduce risks, and achieve financial stability. To date, MESPT has disbursed over Kes. 6.4B worth of loans accessed by over 20,000 enterprises. In turn, these loans have contributed to alleviating poverty by creating jobs, expanding markets for agriproducts and services and facilitating green transition.