Greenland Fedha Limited, a subsidiary of Kenya Tea Development Agency (KTDA), has issued loans worth Ksh10 billion this year compared to the Ksh5 billion it disbursed to small scale tea farmers the year before.
The high amount issued follows the company’s move to deep slash the interest rates in December 2021.
Greenland Fedha Limited Chairman Chege Kirundi said the reduced interest rates aim at
increasing small scale farmers’ access to affordable credit to enable them meet their daily basic needs.
“The low rates led to an increase in loans uptake. We realized that as a result of the high rates, many farmers defaulted on their loan repayments and opted for other lending institutions,” he said.
Kirundi added that plans are underway to review the interest rate since the eight per cent is below the Central Bank of Kenya (CBK) rate of 10 percent.
He urged farmers to produce quality tea to sustain the high tea prices and to make a profit from tea farming.
“Greenland Feather Limited uses green leaf as loan collaterals,” he said, further urging the farmers to improve their farming skills and venture into other income generating activities to increase viable income.
By Macharia Kiarie
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