Feasibility of Green Credit as an Incentive for Natural Resource Management in Kenya

Ngigi, Obadiah H. (2018). Feasibility of Green Credit as an Incentive for Natural Resource Management in Kenya. UNU-INRA Working Paper. UNU-INRA.

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  • Sub-type Working paper
    Author Ngigi, Obadiah H.
    Editor Ayuk, Elias T.
    Quartey, Vicentia Y.
    Title Feasibility of Green Credit as an Incentive for Natural Resource Management in Kenya
    Series Title UNU-INRA Working Paper
    Volume/Issue No. No. 32
    Publication Date 2018-09-21
    Place of Publication Accra
    Publisher UNU-INRA
    Pages vii, 25 pages
    Language eng
    Abstract The greatest challenge smallholder farm enterprises in Kenya face is soil degradation through soil erosion. Past command and control approaches as well as other incentive-based approaches have focused on downstream interests, while ignoring the value of good soil management practice as a business operation within the farming enterprise. Farmers could potentially benefit from improved soil conservation and therefore ensure sustainable productivity of their soil asset. Despite the interest in soil conservation practices, they cannot afford initial costs and sometimes lack technical knowledge requisite for establishing the appropriate technologies. Existing credit service providers do not consider soil as an asset and do not have provisions for supporting its conservation. Additionally, smallholder farmers lack incentives to invest in sustainable agricultural practices. Appropriately designed green credit can provide both incentive and impetus for farmers to invest in sustainable soil and water management practices, which reduce soil erosion and in the long run ensure restoration of soil fertility and land productivity. This feasibility study was conducted to determine the demand for environmental conditional credit and the factors affecting farmers demand for it. Contingent valuation method was used to estimate the demand and factors affecting green credit. Results obtained from a survey of 100 smallholder farmers reveal that there is demand for environmental conditional credit among smallholder farmers in Kenya and that green credit can be a strong incentive for behavior change towards natural resource management. The study recommends the establishment of a fund for environmental lending to improve ecosystem-based adaptation.
    Keyword Farmers
    Sustainable finance
    Green credit
    Kenya
    Copyright Holder UNU-INRA
    Copyright Year 2018
    Copyright type Fair use permitted
    ISBN 9789988633318
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    Created: Fri, 21 Sep 2018, 21:09:00 JST by Vicentia Quartey on behalf of UNU INRA