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New Kenya Planters Co-operative Union (New KPCU) has so far advanced Sh5 billion cherry fund loans to 371,242 farmers, a new report says.

The Coffee cherry advance fund report released by New KPCU indicated that as at August 5 the loan advancement to farmers had increased by 354.5 per cent from mid-November 2023. 

New KPCU Managing Director Timothy Mirugi attributed the appetite by farmers to borrow more from the kitty to the low interest rates offered and improved governance disbursement systems.

“The increase in loan advancement has also been prompted by lack of collateral apart from coffee and cherry required, no cumbersome paperwork like the financial institutions as long as you are proved to be a coffee farmer who is producing coffee in Kenya,’ he stated in a phone interview.

He also attributed the increased advancement to quick disbursements and recovery of the same through the Co-op Bank managed Direct Settlement System (DSS) or once coffee has been sold.

Since the beginning of the 2023/24 coffee year or October 2023 to date Sh1.5 billion has been received through the DSS which enables the farmer to receive direct coffee payments immediately after payment from the buyers, as opposed to through an intermediary.

During the 124th Session of International Coffee Organisation (ICO) at Kenyatta International Convention Centre, Nairobi in March 2019 former President Uhuru Kenyatta announced establishment of a Sh3 billion cherry advance revolving fund as part of bigger plans to revive the struggling coffee sector. 

Kenya Kwanza Government boosted the fund with Sh4 billion more in December 2023 to accelerate recovery of the once country’s leading foreign exchange earner. 

Mirugi said as at November 14, 2023, the farmers had borrowed Sh1.1 billion, adding that New KPCU in collaboration with other stakeholders have aggressively undertaken sensitisation sessions with farmers countrywide on the importance of borrowing the fund.

“Out of the efforts fast tracked for the last almost nine months, 371,242 farmers have borrowed Sh5 Billion, money that increased by Sh3.9 billion from November, 2023,” he told Business Hub.

Mirugi confirmed seven counties from Mount Kenya borrowed Sh2.9 billion of the total amount accounting 58 per cent. Nyeri County topped the list of beneficiaries after 70,660 coffee growers borrowed Sh701.1 million followed by Kirinyaga where 70,353 farmers borrowed Sh566.7 million.  Kiambu, Murang’a, Embu, Meru, and Tharaka Nithi counties 109,152 farmers in total borrowed Sh557.9 million, Sh482.8 million, Sh330 million, Sh254.2 million and Sh39.5 million respectively.

In emerging coffee counties of Trans Nzoia, Uasin Gishu, Nandi, Migori, Nyamira, Baringo and Kisii 19,963 farmers received Sh582.7 million from the kitty.

Mirugi explained that in the July 29–August 5, 2024 week New KPCU disbursed Sh69,159,297 to 5,370 beneficiaries across 14 counties of Bungoma, Embu, Kericho, Kiambu, Machakos, Nandi, Trans Nzoia, Tharaka Nithi, Nyamira, Meru, Migori, Murang’a, Nakuru and Nyeri.

The highest disbursement in the review week was in Machakos County whereby 4,915 coffee farmers benefitted with cherry advance of Sh45, 984,424.

Mirugi said the amount was disbursed to smallholder coffee estates and small holder coffee growers, noting that Machakos County is at their peak coffee picking season.

“The highest disbursement to specific farmers’ co-operative society was to Mukuyuni whereby 879 farmers benefitted from cherry advance of Sh13,872,34 at the rate of Sh40 per kg of cherry,” he added.