The 2024 Financial Benchmarking Report presents an analysis of key Agri-SME lending trends in East Africa, drawing insights from a dataset of 20k agriculture loans valued at $1.2B disbursed between 2019 and 2022. This data was sourced from 35 lenders, including commercial banks, non-banking financial institutions (NBFIs), and multi-country social lenders operating across Kenya, Rwanda, Tanzania, and Uganda.
Key takeaways:
- Agri-SME lending by these lenders has experienced remarkable growth, with the value of the loan book tripling between 2019 and 2022 from $154M to $497M.
- Notably, Tanzania leads this growth trajectory, propelled by supportive central bank policies initiated in 2021.
- Commercial banks make up 90% of the loans in the dataset and their lending is increasing at an impressive compounded annual growth rate of 50% from 2019 to 2022.
- The vast majority of the growth is concentrated at smaller ticket sizes below $200k, with the $10k-25k segment substantially outpacing growth in the other loan size segments.
- 20-35% of loans are consistently allocated to new borrowers across most countries and lender types, signaling steady and sustainable growth.
- Bank lending to agriculture has more than tripled in volume and doubled as a total share of their loan portfolios (from 2.0% in 2019 to 4.1% in 2022); but Agri-SME lending still constitutes a modest proportion of their overall lending.
- Lenders continue to highlight high risks and origination costs as primary impediments to Agri-SME lending.
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