The former Kenya Planters Cooperative Union has cleared the remaining Sh185 million that it owed KCB, freeing itself from the receivership chains after nearly a decade.
Chief Administrative Secretary in the Ministry of Agriculture Ann Nyaga said that part of the Sh3 billion received as coffee cherry fund was directed towards debt repayment.
The old Kenya Planters Cooperative Union (KPCU), now defunct, has been under receivership by the bank since 2009 after it failed to honour its financial obligation amounting to over Sh700 million, owed to the lender, lawyers and farmers.
“We received Sh3 billion from the government meant for coffee advanced fund and part of it went towards paying the debt to KCB #ticker:KCB ,” said Ms Nyaga.
The acting commissioner of cooperatives Geoffrey Njan’ngombe confirmed to the Business Daily that the debt owed had been fully settled.
“I can confirm that KPCU has paid Sh185 million to KCB, settling the debt that they have been owing the bank,” said Mr Njan’ngombe.
The new KPCU, which is in charge of the cherry fund, was formed by Agriculture Cabinet Secretary Peter Munya in a bid to revamp the coffee sector.
Mr Njan’ngombe said 50 percent of the rental income that KPCU had been collecting went towards settlement of the loans, with the remaining amount left for the daily running operations of the entity.
The official also confirmed that KPCU has paid Sh68 million to farmers as an outstanding debt that had accumulated over years.
He added that the process of liquidating the firm has been finalised and it is expected to come to an end in about a month’s time.
“The liquidator has finished the exercise and I am currently waiting for the report any time. The process will end within six months that we had stated in February,” the commissioner said.
The old KPCU brought together more than 700,000 small scale farmers who were attached to over 400 coffee co-operative societies.
By 2014, it had been estimated that the once giant cooperative had an asset base of more than Sh5 billion.