Coffee farmers borrow only Sh200m from State fund in two years

A farmer tends to his coffee bushes in Nyeri town on November 9, 2021. PHOTO | JOSEPH KANYI | NMG

What you need to know:

  • According to Kenya Planters Cooperative Union (KPCU), only Sh200 million has so far been distributed to coffee farmers out of the total amount.
  • Agriculture Cabinet Secretary Peter Munya attributes the low uptake to a lack of awareness by farmers on the existence of the funds.
  • The ministry has now given coffee cooperative officials two weeks to register qualified farmers for the revolving cherry fund.

Coffee farmers have shunned the Sh3 billion Coffee Cherry Advance Revolving Fund, with only a small section of growers taking loans from the kitty since it was launched two years ago.

According to Kenya Planters Cooperative Union (KPCU), only Sh200 million has so far been distributed to coffee farmers out of the total amount.

Agriculture Cabinet Secretary Peter Munya attributes the low uptake to a lack of awareness by farmers on the existence of the funds.

The ministry has now given coffee cooperative officials two weeks to register qualified farmers for the revolving cherry fund.

“The uptake of the cherry fund is still low due to low levels of sensitisation by cooperatives about the fund,” said Mr Munya.

He previously alleged that managers of some co-operatives societies have been blocking members from applying for cheaper loans, frustrating investment in farming of the cash crop.

He said some officials colluded with commercial banks to profiteer through costly loans to farmers. Farmers normally pay an interest rate of three percent on the cheery fund loans.

This is much lower than bank loans which currently stand at an average of 12.1 percent.

The Ministry of Agriculture had previously said that it was considering expanding the State-backed fund to offer additional services in the sector following the slow uptake.

The government said even though the fund was meant for loaning, it is sufficiently large and can be utilised for other activities within the sector.

“Even though it was meant for loaning, we think it’s large enough and can be utilised for other things, but we still want it to remain a revolving fund to help stabilise the coffee sector. We do not want to take it to risky businesses,” Mr Munya said earlier.

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