A Sacco in Murang’a has said it will have to reschedule tea farmers’ loans due to decreased annual bonus payments.
Amica Sacco chief executive officer James Mbui has said many farmers will have a challenge clearing advance loans taken against the bonus payment.
However, he said the Sacco has put measures in place to cater for the farmers.
“We are appealing to farmers, who are unable to clear their loans, to go to the Sacco and have them rescheduled with the expectation that there will be better prices next year,” Mbui said during a special general meeting on Friday.
He said the decreased tea prices will adversely affect financial institutions that deal directly with the farmers.
Mbui said that this year, the Sacco received half a billion shillings as payment for coffee farmers.
"Last year, coffee payments paid through the institution were Sh1.2 billion," he said.
At the same time, tea farmers were paid an average of Sh35 to Sh40 per kilogram for their produce last year. The income is expected to decrease to an average of about Sh25 to Sh30 per kilogramme this year.
The slump in prices of coffee and tea has reduced the cash flow in the Sacco.
Mbui, who was spoke during a special general meeting, said the sacco is projecting a total income of Sh803 million expected to be driven mainly by growth in loan book and fee-based income drawn from alternative business channels.
He also asked the Central Bank of Kenyan (CBK) to consider extending the deadline for submission of old currency notes by financial institutions.
He said the same deadline issued for Kenyans is the same one that financial institutions are required to submit the notes collected from their clients.
Mbui urged CBK to extend the deadline for at least a week in case there is still some old notes streaming in.
