Boon for tea farmers as KTDA unit advances Sh4.3b to drive activities

Kenya Tea Development Agency (KTDA) fully-owned subsidiary Greenland has advanced Sh4.25 billion loans to small-scale farmers in the last eight months in the current financial year.

Wilson Muthaura, KTDA chief executive said in an interview that the institution has advanced  more loans for the July  2021 and end of February 2022 period compared to Sh4 billion issued in 2020/21 financial year. 

KTDA board lowered interest rates to 8 per cent in December 2021 from a high of 21 per cent. Before December last year, growers had been getting loans from microfinance at interest rates of up to 21 per cent, which is higher than the 12 per cent that commercial banks charge. 

The interest reduction rates, Muthaura noted, has increased loan uptake by 225,000 tea growers who borrow from the microfinance and thus enabling them to finance their desired economic activities. ”We have witnessed tremendous growth in terms of borrowing, especially from December 2021 to the end of February 2022. Reduction of the interest rates to 8 per cent is part of ongoing implementation of new reforms and it is bearing fruits,” said Muthaura.

He explained that out of issued loans, Sh2.75 billion was borrowed between December 1, 2021 and February 28, 2022 and between July and end of November 2021, growers had borrowed only Sh1.5 billion. 

“Our institution advanced Sh4 billion in 2020/21 and we expect before the end of 2021/22 fiscal our loan book will have expanded to more than Sh6 billion which is a big plus,” he added.