Coop Bank of Kenya: Financing Agriculture in Kenya

By Amina Faki

Farming in Kenya although a less percentage of Kenya’s land is under agriculture, farming is Kenya’s most important economic activity.

With most of Kenya’s land mass being arid or semi-arid, only about 20 percent is suitable for farming. About 80 per cent of Kenya’s workforce engages in farming or food processing. Farming is typically carried out by small producers who usually cultivate no more than five acres using limited technology.

Farming in Kenya is the mainstay of the Kenyan economy, contributing 23 percent of the Gross Domestic Product (GDP)

Cooperative Bank has made it even easier for small-scale farmers in the country by the introduction of the Agri Co-operatives which facilitates help to all their financial needs.

Below are some of the Agri Co-operatives offered by Cooperative Bank to both the small scale and large scale farmers in the country in financial aid through loans.

Maziwa Plus Loan

Cooperative Bank of Kenya gives Maziwa Plus Loans to individuals to enable Dairy groups/ associations, societies, individuals and dairy companies access loans for dairy production and value addition equipment including buying additional cows and chilling equipment.

Tegemeo Loan

These are given by the bank to farmers to cover the short term financial needs of farmers supplying accredited buyers and aggregators through advances based on their deliveries.

Currently the bank offers Tegemeo Loans to the following accredited buyers; New KCC, Brookside Dairies, Githunguri Dairies, Meru Central Dairies, Homegrown, Sasini, Unga group, Incas, EABL, BAT, NCPB, Spectre International, Kenya Seed Company , Milly processors, KCCE, KTDA, Mastermind Tobacco Ltd, Dairy processors, Major flour millers, Fresh produce exporters, meat processors and tea companies.

Vuna Kilimo Loan

This enables individuals, cooperatives or corporate firms undertaking agricultural production activities access loans for purchase of farm inputs, equipment, set up greenhouses and irrigation systems.

Nafaka Loan Small-Scale

This kind of loan offered to small scale farmers to enable them access farm inputs for production of cereals which include maize, wheat, barley, sorghum, rice and millet among others.

Nafaka Large-Scale

Loan offered to large-scale farmers to enable them access farm inputs, working capital, farm equipment and other social needs e.g. school fees, medical bills, furniture etc

Stabex fund

To meet the short-term financial needs of coffee societies and farmers. It is offered in form of Farm Input Loans (FILS)
To enable coffee farmers to access to farm inputs.

Nafaka Loan Agro-processor/dealers

The loan offered to agro-dealers, grain traders and processors for working capital requirements (Capital investments, stocking their businesses and day to day operations).

Cherry Advance Payments (CAPS)

Advance payment to coffee farmers against actual coffee deliveries. It also facilitates coffee picking and delivery

Working capital loans (Individual)

Enables coffee farmers to cater for operations. This is Applicable to individuals/coffee estates only.

Used for day-to-day coffee farming activities e.g. weeding

Working Capital (Societies)

Enables coffee societies to finance long-term operations. Used to finance society’s long-term activities for a period exceeding 12 months.

Working capital Overdraft (Societies)

To enable coffee societies to finance short-term activities.

Used to finance society’s short-term activities for a period not exceeding 12 months.

Asset Finance (AF)

To enable clients to acquire assets mainly motor vehicles and machines.
Used to finance the client to purchase motor vehicles and machines both new and used

Insurance Premium Finance (IPF)

Enable the society to pay the insurance premium for their assets.
Used to assist societies in paying insurance premiums for their properties

 Vuna Kilimo Biashara

To enable individual farmer, associations/group/co-operatives to access farm inputs and agro-dealers access working capital under the Ministry of Agriculture credit guarantee scheme.
Only Farmers should be engaged in the production of cereals and horticulture.