PureCircle, a Malaysian company farming stevia in Kenya, has entered into agreements with two microfinance institutions to give loans to farmers growing the natural sweetener in Kericho.
PureCircle’s management said it made guarantees to buy harvested stevia from farmers in Kericho which then made it possible for Ndege Chai Sacco and Agriculture Finance Corporation (AFC) to advance the loans to farmers.
The company, which is listed on the London Stock Exchange, said that it also entered into negotiations with the two microfinance institutions to have the loans advanced at interest rates that are below the market level to about 2,200 farmers.
The firm, however, declined to give the rates.
“We cannot disclose the rates. That is between us and the microfinance institutions,” PureCircle Kenya senior finance manager David Ruheni told the Business Daily.
The loans amount to Sh91 million. The company, however, prohibits the two lenders from deducting more than a third of the income farmers earn from selling stevia harvest.
“Through PureCircle’s partnership and guidance, the micro-finance organisations have developed terms that enable successful repayment, such as a two-year payback period, low interest rates and a guarantee that the financial organisation does not deduct more than 30 per cent of gross proceeds from any one payment,” said Pure Circle’s 2014 sustainability report.
The latest price for stevia is Sh140 per kilogramme, a price that has been sustained since July 2014.
Global demand for stevia has been on the rise as more beverage makers switch to the natural sweetener as a market response to health-conscious consumers.
PureCircle said Coca-Cola and Pepsi have begun using stevia as sweeteners. There is also growing demand for stevia from the confectionary industry.
“The period has also seen a wide range of stevia sweetened product launches from major retailers across Europe and America and iconic brand adoption in categories as diverse as ketchups, yogurts and confectionery,” said the company when it released its half-year results.
Sales for the first half-year to December 31, 2014 stood at $43.3 million (Sh3.94 billion) from $34.8 million (Sh3.12 billion) in the previous period.
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
