Kenyan Farmers to Benefit as Equity, IFAD Launch Ksh 25.8B Climate Finance Facility
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Equity Group and the International Fund for Agricultural Development (IFAD) have launched a US$200 million financing mechanism to help smallholder farmers and rural businesses access funding for climate adaptation.
The Africa Rural Climate Adaptation Finance Mechanism (ARCAFIM) will target 260,000 smallholder producers and 500 rural enterprises across Kenya, Uganda, Tanzania and Rwanda.
The 12-year facility was launched on September 8, 2026, during the Africa Food Systems Forum 2026 in Kigali, Rwanda.
Equity Group Addressing the Climate Finance Gap
IFAD and Equity Group said access to climate adaptation finance remains a major challenge for smallholder farmers and rural businesses across Africa.
Available capital often fails to reach the communities and enterprises that need it most. ARCAFIM aims to bridge this financing and delivery gap by providing private sector-led funding to businesses and farmers across East Africa.
Equity Group will match concessional capital with funding from its own balance sheet as part of the mechanism.
$180M Set Aside for Lending
The facility will comprise US$180 million in lending capital and approximately US$20 million in technical assistance.
The lending capital will revolve over about four investment cycles during the 12-year period. This is expected to generate approximately US$266 million in loans to micro, small and medium-sized enterprises (MSMEs) and smallholder farmers.
The funding will support businesses and farmers operating within East Africa’s food systems.
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Support from Development Partners
ARCAFIM has been convened with co-financing from the Green Climate Fund, the Ministry for Foreign Affairs of Finland and the Nordic Development Fund.
The mechanism will also receive co-financing from the Government of Denmark and the European Union.
Through the combination of lending and technical assistance, the facility seeks to strengthen the ability of rural enterprises and farmers to invest in climate adaptation while improving access to finance.
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Farmers to Get Support for Climate-Resilient Investments
Beyond providing loans, ARCAFIM will offer technical support to help farmers and rural businesses identify investments that can protect their livelihoods from climate-related risks.
The support will cover areas such as irrigation and water harvesting, dairy and livestock resilience, post-harvest storage, renewable energy and climate-resilient agro-processing.
It will also strengthen the capacity of microfinance institutions and SACCOs to provide climate adaptation financings.
Moses Nyabanda, Managing Director of Equity Bank Kenya, said the bank would finance farmers both directly and through microfinance institutions, SACCOs and value-chain companies.
“The goal is simple, enable farmers and agricultural businesses to adapt, increase production, grow revenues and incomes, and become more resilient to the effects of climate change,” Nyabanda said.
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L-R: Equity Bank Kenya Managing Director, Moses Nyabanda, and Gérardine Mukeshimana, IFAD Vice President, during the signing ceremony of the Africa Rural Climate Adaptation Finance Mechanism (ARCAFIM) in Kigali, on the sidelines of the Africa Food Systems Forum 2026, on 4th September
PHOTO/Equity