Tea growers have received Sh7.5 billion in loans in six months from the Kenya Tea Development Agency (KTDA) subsidiary Greenland Fedha Limited.
The microfinance cut its interest rate to eight percent in December 2021, down from the 21 percent it was charging, saving farmers Sh500 million during the period, the lender said.
The high interests had seen farmers and the government raise concern, questioning how growers could be charged exorbitant rates, higher than the 12 percent commercial banks charge, when borrowing money from their entity.
“We have increased the volume of lending and, in the process, saved for the farmer Sh500 million, which we would have collected as interest. The money is now being retained by the tea grower, and this is the right way of supporting them,” Greenland Fedha chairman Chege Kirundi said Tuesday.
The microfinance uses farmers’ green leaf as collateral to issue loans.
Mr Kirundi said growers apply, receive and repay their loans through their mobile wallets.
“We are digitally enabled, and farmers have realised that the system is convenient and cheap,” he added.
The chairman said they have about 650,000 growers as customers. “Out of 650,000, not everyone has borrowed, and we are trying to enrich and extend our services to all of them,” he said.
The growers borrow for projects, paying schools fees and meeting their daily needs.
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