Equity Bank, IFAD Launch KSh25.8 Billion Climate Financing Programme for Farmers
The International Fund for Agricultural Development (IFAD) and Equity Group have launched a KSh25.8 billion climate adaptation financing programme targeting smallholder farmers and rural businesses across East Africa.
The International Fund for Agricultural Development (IFAD) and Equity Group have launched a KSh25.8 billion climate adaptation financing programme targeting smallholder farmers and rural businesses across East Africa.
The initiative, known as the Africa Rural Climate Adaptation Finance Mechanism (ARCAFIM), was launched during the Africa Food Systems Forum 2026 in Kigali, Rwanda. The 12-year programme is expected to provide financing to approximately 260,000 smallholder farmers and 500 rural micro, small and medium-sized enterprises across the region.
The programme will operate in Kenya, Uganda, Tanzania and Rwanda, with women expected to account for at least 50 per cent of the beneficiaries, while young people will make up about 30 per cent of those targeted.
ARCAFIM is supported by a consortium of international and financial institutions, including IFAD, Equity Group, the Green Climate Fund, Finland’s Ministry for Foreign Affairs, the Nordic Development Fund, the Government of Denmark and the European Union.
The financing package comprises US$180 million, equivalent to about KSh23.3 billion, in lending capital and approximately US$20 million, or KSh2.5 billion, for technical assistance.
The partners expect the lending capital to revolve through about four investment cycles. This could generate approximately US$266 million, equivalent to KSh34.4 billion, in loans for smallholder farmers and rural businesses across East Africa.
Equity Group will contribute US$90 million, approximately KSh11.6 billion, from its own balance sheet, matching the concessional contribution on a one-to-one basis.
The funding will support investments designed to help farmers and rural enterprises cope with the effects of climate change, while improving their productivity, incomes and resilience.
IFAD Vice President Dr. Gérardine Mukeshimana said the success of climate adaptation financing would depend on turning international commitments into practical investments that directly benefit rural communities.
She said the initiative is intended to make climate adaptation financing a sustainable business opportunity for African financial institutions rather than a temporary intervention.
The programme is also expected to contribute to food security for approximately 1.2 million people and directly and indirectly benefit an estimated 1.5 million people.
Equity Group Managing Director and Chief Executive Officer Dr. James Mwangi said the initiative would change the way financial institutions approach smallholder farmers and rural borrowers.
He described farmers as entrepreneurs operating in challenging environments and said what they have lacked is a financial system capable of supporting their businesses.
Equity Bank Kenya Managing Director Moses Nyabanda said the bank would provide financing directly to smallholder farmers and agricultural producers, as well as through microfinance institutions, SACCOs and agricultural value-chain companies.
The Green Climate Fund has committed US$55 million, approximately KSh7 billion, to the programme.
Beyond loans, ARCAFIM will provide technical assistance to participating microfinance institutions and SACCOs to strengthen their ability to offer climate adaptation financing.
