A Murang’a Sacco has mooted plans to reschedule loan repayment period for tea farmers after they received a depressed bonus this year.
Amica Sacco Chief Executive Officer (CEO), James Mbui, asked the affected farmers to visit the Sacco offices and negotiate for extended time to repay their loans.
Speaking during a special annual general meeting held in a Murang’a hotel, Mbui said the farmers were to pay more than a third of the accrued loans using their bonuses.
“From the reduced bonus rates being paid this year, we see a scenario where the majority of tea farmers will not be able to service their loans and as a Sacco which is owned by farmers, we have no alternative other than rescheduling loan repayment period,” noted Mbui.
The farmers, he added, owes the Sacco more than Sh. 500 million which they sourced as loans to boost production of their cash crop.
This year, KTDA released Sh. 20 billion as bonus as compared to Sh. 27 billion which was given as bonus to all 69 affiliated tea factories.
There are 10 tea factories in Murang’a County which will pay bonus at rates between Sh. 30 and Sh. 17. The amount is said to be minimal compared to the bonus paid last year.
“As a Sacco, we will recover what we can and reschedule to recover the remaining amounts next time. We hope by next year, with reforms being implemented in the sector, the bonus will be high,” he said.
Mbui called upon the tea farmers to come to the Sacco offices and restructure their repayment plans promising that the society will continue supporting them this time they are experiencing financial challenges.
“We know the farmers have other responsibilities such as school fees and may not be able to pay us the whole amount this time,” he further observed.
Meanwhile, Mbui stated, coffee returns had been better this year urging farmers to increase production so as to benefit more now that coffee prices are better.
“This year, some societies bought coffee at more than Sh. 100 and we hope the good prices will persist as we also encourage our farmers to increase their production,” he further said.
He also noted that milk prices had stabilized and farmers were benefiting from the improved prices. The CEO further said Sacco is embracing digital platforms so as to reduce cost of operations and increase profits.
By Bernard Munyao and Purity Mugo