Borrowing money did not come naturally to James Gachacha Chira. The 56-year-old, who farms a smallholding in the shadow of
"I was afraid of borrowing money as I heard that farms are repossessed when you can't pay," the father of six admits. "So I never used credit before."
Gachacha was persuaded to change his mind after accompanying a friend one afternoon to a talk being given by a Kenyan agronomist at a local hall. Obadiah Ngigi had quit his well-paid job with
Ngigi had spent months designing a green loans scheme that would offer cheap credit to small farmers in return for simple conservation measures. He grew up not far from the Aberdares' forested peak, where the soil was good enough to attract the attention of British colonists who decamped here in such large numbers that it came to be known as the white highlands.
These days, outside of a handful of big commercial farms, the land is divided into thousands of small plots, many of them on slopes where soil erosion has been accelerating. In the past 60 years, a third of the world's arable land has been lost to soil degradation. This has led to falling yields in much of
Ngigi, a former headteacher, concluded that farmers needed expert technical advice as well as credit. "There was a credit gap but also a need for conservation in order to make sure the farms were productive in the long term," he explains. "We offer high-quality technical advice to farmers so they can build their soil and water capacity."
Gachacha took up a starter loan of around £15, repayable in one month, and received a visit from Ngigi. They worked on a conservation plan for the land and signed a contract. Clients can graduate to bronze status, and a loan of twice the size, when the initial loan is repaid on time and the first conservation measures are undertaken.
This system extends to platinum clients, who can borrow £180, repayable over a year. The loans are not secured against fixed assets but against items bought with the credit, such as water tanks or a greenhouse.
Gachacha, who farms mainly potatoes and cabbages in rotation, spent the first loan on seeds and manure. He says the system makes sense to him: "I felt like it was manageable, this graduating slowly."
The Farmer's Life loans system, launched last July, has completed its pilot stage, with 50 smallholders successfully climbing the credit ladder to silver status. A further 100 farmers have been identified as the scheme looks to expand by doubling every six months the number of clients it offers loans to.
The conservation measures required include planting grass strips into sloping fields and the conservation and planting of trees, all of which helps prevent soil erosion.
While its reach remains micro,
Ellis-Jones, who until recently worked on the design of micro-finance packages in
The eventual aim, says Ellis-Jones, is to create
Each client receives a monthly farm inspection as well as text message reminders when payments are due. The incentives include a sliding scale of interest payments – initial loans are offered with a monthly interest rate of 5%, which falls to half that rate after three loans are repaid.
So far the results have been encouraging. As well as a performing loan book, Ngigi and Ellis-Jones have witnessed a changed physical landscape. After six months of planting strips of grass along the contours of his potato fields, Gachacha can see terraces emerging on his land. Soil that would earlier have been washed downhill into the stream has been dammed by the thick roots of the grass, accumulating into a fertile step.
Gachacha, whose rows of fat cabbages have become the envy of the area, is enjoying the attention. "There are so many neighbours who are asking about it," he says, smiling.
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