IFPRI, ILRI lead workshop to develop climate finance for women dairy farmers

KENYA – IFPRI and the International Livestock Research Institute (ILRI) researchers have convened a diverse group of stakeholders and finance partners under the auspices of the CGIAR Climate Action Science Program (CASP) to explore challenges and opportunities in developing financial products to help women smallholder dairy farmers build long-term climate resilience.

The workshop brought together participants including Africa Biogas Programs, Private Equity Support (PES), and Jawabu Biashara, a microfinance company targeting clean energy investments for smallholder farmers in Kenya.

Building the right implementation architecture to improve smallholder climate finance requires assembling the right mix of data, institutions, and financial mechanisms to move from isolated, unsustainable pilot projects to larger-scale, sustained investments, participants agreed.

While many dairy farmers can access small and medium loans through savings and credit cooperative organizations (SACCOs) or the dairy cooperatives, these loans typically cover only small expenditures such as feed purchases and medical expenses.

Financing to address climate-related emergencies, such as widespread animal deaths from heat stress, and longer-term investments in adaptation, such as climate change-adapted stables, remain structurally out of reach.

Diana Gichaga, Founder and Managing Partner at Private Equity Support (PES), emphasized that designing and de-risking credit products that target small and medium-sized enterprises (SMEs)—including many women-owned dairy farms—requires a much better understanding of their financial needs and investment capacity.

Yet many of those farms and other SMEs operate with limited documentation, making it difficult for lenders to assess risk.

Climate change is increasing risks for smallholder dairy farmers in Kenya, many of them women. Heat stress and reduced quantity and quality of fodder harm animal health, resulting in reduced milk quantity and quality. That, in turn, affects human diets, nutrition, and health.

Confronting these risks—ensuring that animals are healthy, farmers see continued income from dairy production, and communities improve dietary diversity through more and better-quality milk products—requires considerable investments in climate adaptation.

In addition, another target for climate investment is reducing the greenhouse gas emissions (GHGs) from dairy operations, for instance, installing systems that use GHGs captured from manure to generate renewable energy.

However, smallholders, particularly women, are largely excluded from existing climate finance instruments.

Despite growing interest in climate finance, most lending mechanisms are poorly suited to smallholder households, leaving those most exposed to climate shocks without the capital needed to adapt.

Looking ahead

The workshop demonstrated that the building blocks for a climate finance product tailored to smallholder women dairy farmers already exist—but remain fragmented across financial institutions, farmer organizations, researchers, and development partners.

Bringing these actors together through a coordinated climate finance consortium could help transform promising pilot initiatives into scalable investment models.

In the coming months, CASP will conduct a climate finance assessment across several counties to understand women’s existing access to formal and informal finance and identify remaining gaps in credit and insurance for both short-term shocks and long-term resilience investments.

In addition, CGIAR researchers will continue engaging stakeholders to refine climate finance approaches, aiming to bring together Kenyan and Indian regulators and practitioners to develop a pilot model that could be adapted across the regions, demonstrating strong South-South co-learning and shared experiences in the design and testing process.

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