Feed the Future
This project is part of the U.S. Government's global hunger and food security initiative.

Kilimo Booster: How One Loan Product Conquered Kenyan Farmer Finance Constraints

This post was written by Nicole Brand.

Kenya’s digital economy is widely recognized as one of the most robust in the developing world. Launched in 2007, Safaricom’s mobile money service M-PESA is used today by at least one individual in 96 percent of Kenyan households, with over half the population now using the system at least once a month. Due to the expansive growth of M-PESA in the past decade, the number of Kenyans formally included by the financial system has grown by 50 percent, and financial exclusion has more than halved, down to 17.4 percent as of 2016.

Kenya is also a country of farmers, with more than 75 percent of its workforce employed in agriculture. Starting in 2011, Musoni — the world’s first cashless microfinance institution, enabled by M-PESA — sought to better address the needs of Kenya’s smallholder farmers. Through a partnership with the Grameen Foundation, Musoni developed Kilimo Booster (kilimo meaning “agriculture” in Swahili), a loan product with flexible terms and a customizable grace period based on a farmer’s seasonal cash flow.

Musoni and the Grameen Foundation’s partnership began even before Kilimo Booster was launched with a human-centered, design-inspired research process. Their partnership sought to hone in on the unique needs and challenges of Kenya’s smallholder farmers. Yet the partners have embarked on a longer journey together to support the sustainable growth of Kilimo Booster. Digital Development for Feed the Future’s Case Study focuses on two specific technological updates: the development of a tablet-based digital field application to enroll customers and a client-facing phone application enabling customers to query their loan information directly, without needing to consult their loan officer. 

These technological updates, and the iterative processes involved in developing, implementing and testing them, represent Musoni’s vision to be cashless, paperless and data-driven. They also evoke key lessons that all those working at the intersection of technology and development — particularly those thinking about the ways that digital technologies can support the unique needs of smallholder farmers — should take to heart. These lessons reflect the Principles for Digital Development, three of which are explored in depth in the case study: Principle One: Design with the User, Principle Three: Design for Scale and Principle Nine: Be Collaborative. Ultimately, the partnership between Musoni and Grameen Foundation demonstrates how digital technologies can be applied to better support the unique needs of smallholder farmers.

The partnership between Grameen Foundation and Musoni was made possible through support from Feed the Future Partnering for Innovation, a USAID-funded program that helps the private sector to scale and market agricultural innovations for smallholder farmers.

Digital Development for Feed the Future is a collaboration between USAID’s Global Development Lab and Bureau for Food Security and is focused on integrating a suite of coordinated digital tools and technologies into Feed the Future activities to accelerate agriculture-led economic growth and improved nutrition. Feed the Future is the U.S. Government’s initiative to combat global hunger and poverty.

Learn more about the case study and Feed the Future here.

Nicole Brand is a Program Analyst for the Digital Development for Feed the Future team in the U.S. Agency for International Development's U.S. Global Development Lab.