By Azael Masese
The State Department of Co-operatives will soon disburse about Sh170 million to Sot Tea Growers Sacco (Stegro) to revive its operations.
This is part of the Sh300 million debt waiver earmarked for the Bomet County based society whose operations were grounded due to illiquidity challenges.
Senior Deputy Commissioner Geoffrey Njang’ombe said they have already disbursed about Sh130 million to repay the Co-operative Bank loan the Sacco had borrowed.
“Any time from now, we are going to disburse about Sh170 million to the sacco as its indicators point to a positive recovery,” he told Sacco Review.
The society had borrowed a bank loan to construct Stegro Export Processing Zone (EPZ) Tea Factory in Merigi town to process tea for export to American and European countries.
Investing outside its core business however plunged the society into cash constraints forcing Sacco Society Regulatory Authority (Sasra) and the Government to step in.
Its old board was removed through an inquiry and there is a new board in place to steer it to greater heights.
“The previous board did not have proper structures and procurement committee to invest in a project of more than Sh500 million,” he said.
Sh111 million will be paid to its more than 15,000 tea farmers as a bonus.
“If they channel these proceeds through the society, then it can be revived and get back to its feet,” Njang’ombe.
He revealed that they are working with the County Government to revive the society since there is a new board after the old board was removed through an inquiry.
He noted that unlike other societies that are facing liquidation, Stegro did not have a lot of problems.
Its only challenge cropped up when the society invested outside their core business.
“The factory is almost complete and if they sort out the issues such as separating the sacco and factory management it can become sound financially,” he added.
Farmers, he stated, are loyal to the society and willing to patronize its products and this can see it achieve stable and sustained growth with proper management.