Murang’a-based Muungano Microfinance (Muungano MFB), the first such financier headquartered out of Nairobi, plans to cash in on the booming county dairy sector by providing financial solutions to rural smallholder dairy farmers.
The newly licensed financial institution to be based at East End Mall in Kangari has pledged to design financial products that enable farmers to engage in dairy farming as a commercial activity.
Giving reasons for approving Muungano’s application for a licence, the Central Bank of Kenya said its strategy conforms with Kenya’s Big Four agenda of food security through value chain financing.
“Their flagship products are designed to enable farmers to purchase assets, such as dairy cow breeds, quality feeds and appropriate storage,” said the CBK in a statement.
Murang’a has a thriving dairy industry and recently activated a county government-owned milk processing plant that receives milk from coolers it funded and installed in 35 locations.
The county is also the largest supplier of raw milk to Brookside Dairy.
According to the Kenya National Bureau of Statistics’ 2018 Economic Survey, milk sales earned dairy farmers Sh22.7 billion last year, up from Sh20.9 billion in 2017.
Muungano Microfinance is an offshoot of 49-year-old construction-for-rental income firm, Akuria Investments, that Muhika Kageni and late stockbroker Francis Mwangi Thuo founded.
They recruited members to the outfit and marshalled finances to buy prime parcels of land in Nairobi, Juja and Murang’a.
Muungano is owned by Akuria Investment Plc (20 percent) and a 75 percent stake held by individual Akuria shareholders.
In its August update to members, Akuria Investments said upon receiving approval from the CBK, it would turn to shareholders to raise fresh capital of between Sh150 million to Sh200 million to expand the new company.
Rental properties Akuria Investments own include Muhika Kageni, Ngara Heights and Rhapta Terraces in Nairobi and the End Mall in Kangari estimated worth to be worth Sh800 million.