- KTDA chairman Enos Njeru rejects claims that factory loans are used to finance farmer bonuses.
- He says borrowing varies by factory and can fund machinery, operations and expansion.
- Njeru also called for patience as the DCI investigates the Ksh322 million fertiliser transaction.
Tea factories that borrow money are not necessarily taking loans to finance bonuses paid to farmers, Kenya Tea Development Agency (KTDA) national chairman Enos Njeru has said.
Njeru said financing obtained by factories serves different purposes, including meeting operational expenses, purchasing machinery and funding expansion and other capital projects.
Speaking at Kithare in Runyenjes Sub-county on Tuesday, the KTDA chairman said claims linking factory borrowing directly to farmers’ bonuses were misleading, as individual factories have different financial needs and capacities.
He said some factories, particularly those west of the Rift, occasionally seek additional financing when they face cash-flow difficulties caused by low tea absorption at the auction and weak market prices.
However, Njeru said such circumstances should not be used to describe the financial position of all tea factories. He pointed to Rukuriri Tea Factory, saying the facility had borrowed Ksh150 million to finance the installation of machinery for orthodox tea processing.
The chairman disputed reports that the factory had accumulated a Ksh300 million loan, saying the Ksh150 million facility was almost fully repaid.
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Njeru said factories east of the Rift were generally in a stronger financial position and could meet their running expenses, pay farmers and undertake investments aimed at improving production efficiency.
His comments come amid concerns among tea farmers that bonus payments could decline this year, partly due to loans allegedly taken by factories during the previous payout period.
But the KTDA chairman said the existence of a loan should not, on its own, be taken to mean a factory borrowed money to pay farmers.
He said the circumstances surrounding each factory’s finances must be examined separately before conclusions are drawn about its borrowing or ability to meet farmers’ payments.
Njeru also addressed the Ksh322 million fertiliser transaction, calling for patience as investigations continue. He said the Directorate of Criminal Investigations (DCI) probe would help establish the facts and provide clarity on the transaction.
He reaffirmed KTDA’s commitment to transparency and sound governance, saying the agency would continue to safeguard the interests of tea farmers.
By Jonathan Mwinzi
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