In Kahugu-ini, South Gatundu, almost all the farms have a cow.

“I bought my first cow in 2005,” says Kenneth Munyiri, a village dairy farmer. “It’s almost part of our culture to have a cow. ”

Munyiri always wanted to own “a large farm and keep many animals”. The breed he purchased was Ayrshire – a prolific milk producer. He laid the foundation for a thriving dairy business.

At the time, he did not have his own land to establish the farm. This did not deter his ambitions, however. “My father let me operate from his pregnant,” he says.

The herd began to grow. A little over two years ago, the number of cows had increased to eight. Today, Munyiri has more than 20 cows, eleven produce milk: about 240 liters per day.

A year and a half ago, Munyiri left his father’s property to his own 1.5 hectare plot. He was able to buy more animals and expand his farming business to include pig farming as well as poultry farming (diapers).

How did it happen? “I got a loan of 1.8 million shillings from the Co-operative Bank,” he says. “I have received top-ups a few times. This is the money I used to grow where we are now. ”

Which begs the question: How did a young man – with little to his name – get over a million shillings from such a financier?

Agriculture is fraught with pitfalls such as unexpected bad weather, disease and unstable market forces, no wonder financiers avoid them.

Farmers are far from the ideal clients that financial institutions seek for credit facilities. This is how Munyiri – and other farmers with his luck – go about it.

1. Determination: Munyiri calls his business Kenshire Farm. He made the decision to diversify into other forms of agro-industry and agriculture.

“I also produce animal feed – to feed my animals and sell them to other farmers,” he says.

Munyiri (on the picture) is also a pig breeder (with more than 70 pigs) and raises laying hens. The one and a half hectares are clinically compartmentalized and the animal facilities are built to professional standards.

There is an administrative office from which Munyiri and his wife take care of management matters. Everything on the farm communicates a professional food business aimed at generating income.

Esther Kariuki is Head of the Agriculture Department at the Cooperative Bank of Kenya. She says that for a financial institution, it is important that the farmer applying for the loan demonstrates that he is determined to be successful.

“As a financial institution, we don’t just want to give loans to farmers for fun: we have to have faith that the farmer will repay the loan,” Kariuki said.

Before Munyiri received the loan, the bank sent a team to inspect Kenshire Farm: to analyze it and determine its business modus operandi.

2. Demonstrate in-depth knowledge: According to Kariuki, a farmer must show that he knows what he is doing. Lucky for Munyiri, he has a degree in animal health.

He therefore knows breeding and everything related to breeding.

Such a farmer, Kariuki points out, is likely to do it right and make money running the business; greatly increase their chances of getting the loan.

She says: “If you have no experience in dairy farming, we recommend that you consider working with someone who already has experience.

“That way you will learn from their mistakes and increase your chances of success. A farmer who has knowledge and experience inspires confidence in the bank.

“We have even partnered with other institutions to provide farmers with agricultural skills and financial literacy; just so they have a better chance.

3. Availability of agricultural records: When a farmer applies for a loan from a financial institution, says Kariuki, he will be asked to conduct a feasibility study.

The farmer must demonstrate how the farm generates income. It would show expenses and income. It would predict (based on data) how the loan would positively influence the business and therefore positively influence financial flows.

A feasibility study would be impossible if a farmer does not keep records.

“Records are important. The records tell the farmer whether the business is making a profit or a loss. They are absolutely important – and the bank will ask for them – when a farmer applies for a loan, ”says Kariuki.

Munyiri keeps his files in books and on a desktop computer at his office.

4. Have some type of collateral: According to Kariuki, a farmer can get a loan based on his ability to demonstrate that his business is generating enough profit to cover his running costs.

A more direct way to get the loan, she says, would be to provide collateral, such as a car log or title deed.

“With these, even if you weren’t a dairy farmer, you would still get the loan because it’s secured. ”

But in the absence of collateral, she said, the financial institution would have to find another type of collateral.

“Co-op Bank, for example, has partners with whom we work to cover collateral risks. On this point, we have worked with USAid, Agriterra and IFC.

The guarantee, says Kariuki, gives “the farmer the motivation – a reason – to run the business in the most profitable way possible: so that he can pay it back.”

The collateral can be the cows themselves or even heavy farm equipment such as an automated milking pen or tractor.

5. Be a member of a cooperative society: Munyiri is not a member of a cooperative society. It is therefore an exception. However, Kariuki says that a farmer in a cooperative has a better chance of getting a loan.

“We have financed many farmers who are not in a cooperative. However, the majority of the farmers we have funded are in cooperatives.

“The good thing about cooperatives is that they already have records of deliveries from farmers. As a bank ourselves, we believe in the cooperative model.

“Sometimes the cooperative members guarantee each other, so it becomes easy for the bank to give them loans,” she says.