Financing livestock trade: formal and informal finance in Kenya, Mali and Somalia

Africa’s drylands support extensive pastoral and agro‑pastoral systems, with herders marketing livestock through complex chains that connect rural rangelands to urban and export markets.

This report examines the financing of livestock marketing in Kenya, Mali, and Somalia, focusing on traders’ use of formal financial services, such as savings, payments, credit, and insurance, over the past two decades.

Findings reveal that formal finance remains limited in rural drylands, with traders relying primarily on personal savings, family support, and reinvested profits to sustain working capital. Informal lending within marketing chains and social networks continues to play a central role, while mobile payment systems stand out as the most significant innovation, simplifying transfers and expanding access to financial transactions. Few traders access loans from formal intermediaries, underscoring persistent barriers to rural financial inclusion.

The study highlights implications for policy and research on strengthening financial systems to support resilient livestock economies in Africa’s drylands.