SCOPEinsight Revolutionizes Agricultural Financing in Kenya with New Cooperative Rating Formula
Nairobi, The Gulf Observer: In a major step toward bridging the agricultural financing gap, SCOPEinsight, a multinational rating agency supported by the Netherlands Embassy, has introduced an innovative rating system aimed at transforming smallholder agricultural financing in Kenya and other developing nations.
The system evaluates the strengths and weaknesses of agricultural cooperatives, connects them with technical experts and NGOs for capacity-building, and recommends them to financial institutions for access to credit. This move is expected to significantly improve the creditworthiness of small-scale farming groups and attract financing into the agriculture sector — an industry often perceived by lenders as high-risk.
Currently, only five percent of loans disbursed by banks in Kenya go toward agriculture, despite the fact that 75 percent of the population relies on the sector for their livelihood. SCOPEinsight’s initiative seeks to reverse this trend by establishing standardized methods to assess risk and potential within farming cooperatives.
Addressing Structural Gaps in Smallholder Financing
The rating model assesses cooperatives across nine critical areas — including supply, internal management, financial health, sustainability, operations, and external risks — awarding scores from 1 to 5. A score below 3 indicates low performance, while 5 denotes excellence.
Upon assessment, SCOPEinsight provides a detailed report highlighting areas of improvement and links the cooperative with development partners for tailored technical assistance. “Apart from helping farming groups understand their creditworthiness and develop a risk profile, we work with partners to create targeted training in production, financing, and market linkages,” said a SCOPEinsight official in an interview with The Star.
Kabuboni Cooperative: A Success Story
One notable success case is the Kabuboni Farmers Cooperative in Tharaka-Nithi. Initially dependent on coffee farming, the cooperative faced a crisis when international prices fell. Despite dairy farming being an alternative income source, the group lacked cold storage facilities and credible financial documentation — both critical to accessing credit.
SCOPEinsight evaluated the cooperative and linked it with technical experts. As a result, Kabuboni secured KSh 3 million to establish a milk chilling plant, transforming its operations and sustainability.
A National and Global Impact
Since its launch in Kenya nearly a decade ago, SCOPEinsight has assessed over 300 cooperatives, many of which have since improved their profiles and gained access to much-needed financing. The organization is also actively working with financial institutions in Kenya to reconsider rigid lending criteria that often exclude smallholder farmers.
This initiative comes at a time when global agricultural funding is on the decline. A report by the Food and Agriculture Organization (FAO) shows World Bank lending to agriculture dropped from $3.66 billion in 1990 to just $1.34 billion by 2000. In Kenya, agriculture receives just 3.5% of the national budget — despite being a key economic pillar.
A Collaborative Model for Change
SCOPEinsight operates across multiple developing nations in Africa, Asia, and Latin America. It collaborates with organizations such as IFAD, IFC, Solidaridad, ICCO, and local banks to deliver holistic support to agricultural enterprises. While the agency charges a fee for its services, it is exploring a subscription-based model to make its offering more accessible to cooperatives.
“With a change in mindset and greater confidence from financial institutions, smallholder farmers can unlock their full potential and contribute more substantially to food security and national economies,” the agency emphasized.
As agricultural cooperatives become more structured and transparent, the SCOPEinsight model is poised to serve as a cornerstone in redefining rural development and food resilience across the developing world.
