Farmers’ society seeks licence to take deposits
Posted Monday, August 13 2012 at 18:14
A smallholder farmers macro-financier is seeking a licence to take deposits from next year.
The Smallholder Irrigation Schemes Development Organisation (SISDO) chief executive officer Moses Banda told the Business Daily last week that the organisation wants to grow its lending capacity through deposits as it expands its services.
It gives credit to both crop and livestock farmers in form of farm inputs such as fertilisers, herbicides and planting materials, among others, and have branches in all provinces in Kenya.
“Our clients who number 16,000 have cash collateral deposited with us in excess of Sh207.6 million up from Sh181.5 million deposited the previous year,”
“This means that this is cash that is available for onward lending if we were a deposit taking institution. We don’t have to look far, our current client base is sufficient hunting ground for deposits”, Mr Banda told shareholders last week at an Annual General Meeting held at the Harlequins Sports Club in Nairobi.
The organisation saw a profit decline of 37 per cent to Sh12 million in 2011 compared to Sh19.45 million recorded in 2010 which was attributed to high interest rates of 20 per cent which farmers were not able to repay.
There was also a low uptake of loans.
Its loan portfolio grew from Sh218 million to Sh270 million which was a 24 per cent growth over 2010 while balance sheet grew by 13 per cent from Sh414 million to Sh467 million during the same period under review.