Farmers are increasingly shunning the state-backed Hustler Fund and microfinance lenders, opting instead for mainstream banks and mobile overdrafts like Fuliza to finance their agricultural activities, a new survey by the Central Bank of Kenya shows.

The survey reveals that by May 2025, none of the sampled farmers indicated borrowing from the Hustler Fund or microfinance institutions, despite 11 percent and 13 percent respectively having used these sources just two months earlier in March.

The farmers also reduced reliance on cooperative societies and informal lenders.

“The proportion of sampled farmers reporting to have accessed credit for farming remained below 40 per cent. It stood at 34 per cent in May 2025 and 36 per cent in March 2025,” stated the CBK report.

During the same period, more farmers turned to banks and mobile loans. The number of farmers borrowing from banks rose from 41 percent in March to 58 percent in May.

Those using digital credit options such as Fuliza and KCB Mpesa also increased, from 2 percent to 8 percent.

The survey also found that other growing sources of farm credit included buyers of produce, whose share rose from 11 percent to 16 percent, and informal savings and credit groups, up from 9 percent to 16 percent. In contrast, the number of farmers borrowing from saccos declined from 35 percent to 24 percent.

“The main sources of credit to farmers are banks, saccos, family and friends, buyers of farm produce, and digital credit providers,” the survey noted.

While the report does not explain the reasons behind the shift, it shows that the overall appetite for farming loans remains low. Farmers accessing credit remained below 40 percent in both March and May.

In terms of how the borrowed money is used, fewer farmers are spending on inputs like fertiliser, seeds, and pesticides — dropping from 94 percent in March to 84 percent in May. The share of farmers using credit for labour also declined from 62 to 57 percent. However, borrowing for equipment and machinery rose sharply from 25 to 41 percent.

“Use of credit to expand farmland and diversify production ranked low,” the report added.

The Hustler Fund, a key project under President William Ruto’s administration, was launched to offer affordable credit to low-income earners.