A landmark agricultural finance transaction in Kenya has reached its first close, marking the country’s first private-sector local currency securitisation focused on smallholder agriculture.

The deal, led by Kaleidofin in partnership with Apollo Agriculture, mobilised KES 276 million (about US$2.5 million) through the securitisation of agricultural receivables linked to 23,839 smallholder farmers across Kenya.

The transaction received anchor investment support from the IDH Farmfit Fund, a blended finance vehicle focused on strengthening smallholder farming systems.

Structured through Kaleidofin’s ki debt capital market platform, the transaction converts thousands of small agricultural loans into investable financial assets for institutional investors. The structure is designed to improve capital recycling for agricultural lenders while aligning repayment schedules with seasonal farming cycles.

The securitisation model also seeks to improve transparency around agricultural credit risk, helping investors gain clearer insight into underlying loan performance in a sector often viewed as opaque and high risk.

For Apollo Agriculture, the transaction unlocks immediate liquidity and improves capital efficiency, enabling the company to expand lending to farmers without significantly increasing balance sheet leverage. Apollo Agriculture combines farm financing with bundled services including farm inputs, crop insurance and agronomic advisory support, using machine learning and satellite data to assess creditworthiness among underserved rural farmers.

Roel Messie, CEO of IDH Investment Management, said the transaction demonstrates how innovative financial structures can scale access to capital for smallholder farmers while creating investable agricultural assets for institutional investors.

Eli Pollak said the receivables-backed structure would help lower Apollo Agriculture’s cost of funding and expand access to affordable local currency finance for farmers.

The transaction was supported by a wider ecosystem of development finance and market-building institutions. FSD Africa provided assistance on legal and regulatory structuring, investor engagement and market development, while the UK-backed MOBILIST programme supported tax and structuring guidance.

According to Evans Osano, the deal demonstrates how structured finance and market infrastructure can help attract institutional capital into sectors traditionally considered high risk, such as smallholder agriculture, creating a replicable funding model for inclusive agricultural growth across Africa.