Juhudi Kilimo, a rural agricultural oriented micro finance agency, is providing a unique farm assent purchase financing to smallholder farmers in Kenya.
At the same time, the assets can be used as collateral and still earn revenues for the farmer.
The use of the the assets as security is an easy option benefiting thousands of smallholder farmers who are hesitant to provide or lack worthy collateral documents such as car log books and title deeds.
For this reason, they cannot access loans from established financial institutions, which view them as a high risk.
This unique loan also shields such farmers from tedious, time wasting and expensive bureaucratic procedures and high interest rates charged by contemporary banks. Besides the loan, the agency works with various organizations and experts from the Ministry of Agriculture to guide farmers on identifying viable projects, scout for market and link them with farm input distributors in their locality.
How to qualify for the loan
According to Helen Maiyo, a Finance Officer at Juhudi Kilimo, farmers are supposed to be in an independent solidarity loan group in order to benefit from their services. The group is trained by extensional officers on the ground on various agricultural opportunities in the region before each individual farmer is financed to venture into an agricultural activity of his choice.
Cheaper option
The farmer is given a reasonable grace period of three months. She explained that 5 per cent interest per month on a reducing balance charged almost 10 times cheaper than traditional banking institutions. The credit seeker must be guaranteed by other group members in a move aimed to ensure smallholder farmers work and learn from each other.
Success story
Joseph Omwenga’s life transformed for better in 2004 when he joined a local farmers group tied to Juhudi Kilimo in 2004. As a peasant maize farmer, he desired to increase his maize production saw him secure a Sh15,000 loan which he used to rent six more acres and buy farm inputs. He was guided on the best maize variety to plant and best land management practices including pest control which saw him get a bumper harvest hence clearing the loan with a lot of easiness. He has since managed to secure more loans and established dairy farmiing, posho mill, two power saws, tree stands, two motorcycles and video hall, hence multiple income channels.
How to set up a solidarity loan group
A group of 10-15 farmers from same locality join forces to register as a self help group with the ministry of Ministry of Gender, Children and Social Development. They must produce copies of their constitution, minutes of group formation, signed list of members with their national identification numbers. Those documents must be signed by local administrators such as village elder or chief before being submitted at the registration office where a fee of sh1000 is paid.
Once the group had received a certificate, it can now approach a nearby Juhudi Kilimo officer who they are assigned a field officer who monitors their activities.
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For more information about Juhudi Kilimo, kindly contact their head office on 0715446614 or 0733446614 be connected with a nearest branch.