Kaleidofin Closes Kenya’s First Private Securitisation in Smallholder Farm Loans

Mintesinot Niggusie

Kaleidofin has completed Kenya’s first private-sector local currency securitisation in the smallholder agriculture segment, in a landmark transaction that packages farmer credit into investable securities and opens a structured channel for institutional capital into rural lending.

The deal, developed with Apollo Agriculture and anchored by the IDH Farmfit Fund, transforms agricultural receivables into tradable assets through Kaleidofin’s ki platform, a digital infrastructure designed for structured credit markets.

The transaction is valued at 370 million Kenyan shillings in underlying farmer credit and has raised 276 million Kenyan shillings, about 2.1 million US dollars, through the sale of receivables originated by Apollo Agriculture. The portfolio spans 23,839 smallholder farmers, including 51 percent women and about 22 percent first-time borrowers.

Agusto assigned a BBB minus investment grade rating to the issuance, providing external validation of the credit quality of the underlying agricultural loan pool when structured and diversified.

The securitisation is built on Kaleidofin’s ki platform, which enables loan aggregation, risk segmentation and portfolio structuring for institutional investors. It is supported by an artificial intelligence driven risk model, known as ki score, which combines loan performance data, credit bureau information and alternative datasets to assess borrower risk.

The structure allows Apollo Agriculture to convert receivables into liquidity, recycling capital more quickly while aligning lending cycles with seasonal agricultural demand. It also gives investors more visibility into underlying credit performance in a segment often characterised by fragmented data.

Apollo Agriculture, which uses satellite imagery, machine learning and mobile based data tools to assess farmer creditworthiness, said the transaction strengthens its funding model and expands its capacity to lend in local currency without increasing balance sheet pressure.

“This transaction demonstrates how innovative financial structures can unlock capital for smallholder farmers at scale,” said Roel Messie, chief executive of IDH Investment Management, manager of the IDH Farmfit Fund. He said the development of agricultural capital markets requires both financing and infrastructure.

Sucharita Mukherjee, co founder and chief executive of Kaleidofin, said the platform was built to serve underserved borrower segments including smallholder farmers and small businesses. “We are building the foundations for institutional capital to flow into sectors such as smallholder agriculture in a sustainable way,” she said.

Apollo Agriculture chief executive Eli Pollak said the securitisation improves capital efficiency and reduces funding costs. “By converting receivables into working capital, we are able to lower our cost of funds and expand access to affordable, local currency financing for farmers,” he said.

Local currency funding is viewed as critical in agricultural finance, helping borrowers avoid exchange rate risks that can raise repayment burdens in volatile currency environments. The IDH Farmfit Fund acted as anchor investor in a broader programme that could mobilise about 2.37 billion Kenyan shillings and reach more than 130,000 farmers over time.

The transaction also involved technical and regulatory support from FSD Africa and the United Kingdom backed MOBILIST programme, which focused on structuring, tax and investor engagement to support market development for structured finance in agriculture.

Evans Osano (PhD), chief financial markets officer at FSD Africa, said the deal demonstrates how market infrastructure can help unlock institutional capital for higher risk sectors such as smallholder farming, adding that it could serve as a replicable model across African markets.

British International Investment provided technical assistance to Apollo Agriculture through its BII Plus programme, aimed at strengthening reporting systems and technology capabilities to support scalable, local currency funding models.