Farmers have received Sh300 million worth of low-cost loans from the revolving coffee cherry fund in the last two months, marking one of the highest absorption rates since the kitty was started three years ago.
Co-operatives Cabinet Secretary Simon Chelugui said the increase in uptake is attributed to more public awareness of the funds and the easing of stringent requirements that had previously barred farmers from accessing the Sh2 billion kitty.
The Sh300 million taken in January and February is more than the Sh200 million that was absorbed by farmers in the financial year 2020/2021.
It marks an increase in the rate of borrowings from the kitty which had disbursed Sh400 million in the six months ended December 2022.
Mr Chelugui said they have put modalities in place with the cooperatives that are not members of the New Kenya Planters Cooperative Union (KPCU) to access the loan funds for their members, helping to push up the absorption rate.
“Absorption rate has been high because we allowed farmers in cooperatives that are not members of the KPCU to access the funds unlike before when it was strictly meant for cooperatives that are affiliated to KPCU,” said Mr Chelugui.
Stakeholders in the coffee industry had attributed the low uptake to structural and regulatory hitches.
The Coffee Cherry Advance Revolving Fund was rolled out in 2019 with the objective of advancing cheap credit to small-scale growers to boost output and quality of the crop, by tackling delays in payment.
The fund was started to help farmers get access to cheap loans –at a three percent interest rate— to enable them to meet immediate needs for their coffee bushes as they await payment for their produce.
Coffee farmers are not paid immediately when they sell their crops as they have to wait for more than a month before they receive payment from their cooperatives.
