Sub-component 2. 2: Green Financing Facility (GFF) will support the innovative and sustainable transformation of Kenya’s rural economy. It is to be established with RK- FINFA’s supported amount of USD 15 million by IFAD and the Government of Kenya. The GFF will contribute to the sustainable rural transformation, growth, and income generation through alleviating the liquidity constraints of non-bank financial institutions and Micro-Finance Banks that are the main financial service providers to smallholders and rural micro-enterprises, and by encouraging small-scale farmers and micro-firms to invest in climate-smart and environmentally friendly activities.
Sub-component 2. 3 – Access to finance and financial inclusion. The sub- component objective is to facilitate access to appropriate and affordably priced resources to smallholder farmer groups, small scale processors and other beneficiary enterprises supported by the Programme. Expected outcome: smallholder farmer groups, processors, traders and community-based service providers access adapted and affordable formal financial services to sustain their agri-enterprises, including for green investments. Beneficiaries of the financial services will be the eligible members of FOs supported by the Programme. The FOs will play a key role in facilitating access to finance of their members from the financial service providers (aggregation of the demand, monitoring of the use of the loans, group guarantee, etc.). FOs may also benefit from loans to finance services to their members as per their business plans. The SAPZ will adopt a gradual approach for improving beneficiaries’ access to finance and financial inclusion based on the maturity of FOs. The activities to be funded by GCF will be described in detail in the GCF loan agreement.
Sub-component 2. 2: Employment promotion. The Project will contribute (i) to create jobs (including self-employment) for the ultra-poor and poor households having limited access to land, with a specific focus on youth (50%) and women (25%), and (ii) to facilitate the employability and the active integration in the economy of newly graduated students. The Project will provide start up grants for this two objectives.
Sub-component 2. 3: Job market integration / induction. Each student will have the possibility to do two (2) internships of six (6) months each. The recruiting enterprise will be allowed to keep the same student for a second period of six (6) months only if it provides a formal offer of employment to the student. In case of non-compliance, the enterprise will no longer be eligible to participate in the programme. Each enterprise will have a maximum of two (2) students at the same time. Around one hundred and forty five (145) interns per district and per year will be eligible to this programme. Priority will be given to those coming from the poorest families.
Sub-component 2. 2: Agribusiness
Sub-component 2. 1 For the implementation of Component 2, the five Natural Resources and Adaptation Specialist, based in each of the five State Implementation Units, will lead the NR work at the State-level Development & Adaptation Teams (SDATs), which will include appointed specialists from the State administration in the fields of rangeland/pastures, forestry, agriculture, water, and gender & social welfare. The SDATs will have the following tasks:
Sub-component 2. 2 For Sub-Component 2.2, the Programme shall contract an international provider of TA to develop the Drought Monitoring, Preparedness & Early Response System (DMPERS) and deliver the necessary training for its management and maintenance. The DMPERS will be hosted within the Ministry of Livestock, Fisheries and Rangelands. At inception phase of the Programme, the LMRP will agree with the Ministry on the most appropriate arrangement for the outsourcing of the DMPERS management and hosting to a private operator (through PPP arrangements), which will guarantee the sustainability of the system by taking over its management– including update, maintenance and the transfer of data and information to the final users – upon the payment of a nominal fee. The DMPERS will also support the Ministry and its various Administrations in terms of monitoring and predicting seasonal trends and changes of resource availability, drought-related risks (for example, risk of livestock diseases) and marketing information to enable the development of preparedness and response strategies and plans at the central and state levels, involving all the concerned branches of the administration and other stakeholders (livestock and farmers associations, representatives of local communities, NGOs). The DMPERS will build on the databases and information networks already available at the Ministry, and will link with the marketing and extension information system to be developed within Component 1. The Natural Resources & Adaptation Manager (NRAM) will play a pivotal role in supporting Ministry in the production of the National Sectoral Adaptation Strategy for the Livestock Sector, ensuring coordination with the relevant government agencies, both at central and state levels while working closely with the Ministry of Environment. TA will be procured for the preparation of the strategy The NRAM and NRASs will support the State authorities in the design, organisation and implementation of the State-level workshops for facilitating land dispute settlement, including user and access rights. The Programme will also appoint professional, neutral facilitators to run the workshops.
Sub-component 2. 2. Mitigation of social risks. Households and communities will be assisted to effectively manage the social risks that might result from the rapid economic development generated by oil palm investment, including intra- household vulnerabilities, high- risk sexual behaviour, pressure on land tenure systems and social fragmentation.
Sub-component 2. 2: Access to rural financial services aims to promote a savings culture among beneficiaries, facilitate the implementation of business plans and ensure enduring access to affordable financial resources. Through rural institutions and related MSMEs, farmers will be integrated into expanding value chains and have lasting access to affordable financial services for developing agribusinesses – including green investments – to stimulate rapid sectoral development. Financial services supported by the project will be structured around three instruments tailored to the capacities of beneficiary groups.
Sub-component 2. Brokering and investment facilitation. Brokering and cluster facilitation will improve linkages between farmers, buyers and service providers and better exploit market opportunities. A supply chain development facility (SDF) will make small “public good” investments to address issues that emerge from the supply chains.
