Denmark and Micro Support Enterprises Programme Trust (MESPT) have launched Kshs150 million financing facility targeting small and medium enterprises in the agricultural sector. Denmark's Ambassador to Kenya, Bo Jensen, said the rural finance project is to be implemented over the next five years to transform agricultural activities into viable business ventures by providing loans.

He said the Danish Government will provide Kshs150 million through MESPT to farmers and agri-based small and medium enterprises in Kwale, Kilifi, Taveta, Malindi, Makueni, Kitui and Mwingi districts.

He said the fund will assist 18,000 smallholder farmers obtain agricultural production credit and 500 micro and small enterprises obtain asset financing loans.

Jensen said the rural finance project in Eastern and Coast provinces will be implemented by MESPT, which is a Kenyan organisation whose founders are the Government of Kenya and the European Union.

He said Denmark was keen to support rural financial services as part of agricultural business development (ABD) as a key component to help smallholder farmers transform their operations into viable commercial undertakings.

He said the Government of Demark will continue to support the agricultural sector on long term basis through the Agricultural Sector Programme Support (ASPS).

MESPT's Chairman, Peter Munga, said small scale farmers potential to develop is hindered by lack of appropriate financial services, market information and poor infrastructure among others.

He said the rural financial services project is to be rolled immediately as MESPT had partnered with the Government of Denmark to transform farming to viable commercial undertaking.

He said MESPT will work with local organisations to ensure small scale farmers and micro and small enterprises receive the funds provided by the Government of Denmark.