Banked farmers learning how to manage risks

By Bob Aston

Access to financial services is about to provide an opportunity for Kairiri Forest Users and Conservation Community Based Organisation (CBO) in Timau area of Meru County to deal with crop failure. Most of the members had contemplated quitting farming this year after the crop failure.

Sokopepe has been supporting the CBO to increase productivity and profitability of its members. This season, Sokopepe linked them to a micro finance institution to enable them to receive credit.

Members of the CBO going through Sokopepe's Farm Books

Linking the CBO to Times U Sacco Society Ltd has made the members to be among the few-banked farmers in the Country. The Sacco has a Kilimo Bora Loan, which is ideal for farmers due to low interest charged. For close to 5 weeks now the Sacco has been building their financial literacy and capability.

Already 30 members of the group have each paid a Ksh 200 for registration and are now saving Ksh 200 per week. Soon they will be able to receive Kilimo Bora Loan. The farmers can borrow up to 5 times the amount saved.

The Kilimo Bora loan attracts a 7.5 percent interest rate. The repayment is after four months when the farmers have harvested. The 74 member CBO are now planning to cultivate their combined 30-acre farm.

Mr. Bernard Mureithi, a Production Information Agent (PIA) at Sokopepe said that farm Records Management Information System (FARMIS) help financial institutions to know whether farmers are capable of managing risks.

 “The farmers are able to track all their agribusiness enterprises and expenses incurred. This will ensure effective use of Kilimo Bora loans,” said Mr. Mureithi.

Mr. David Kabuari, Kairiri Forest Users, and Conservation CBO Chairman said that access to credit has always been a challenge. Financial institutions always deny them loans due to lack of proper farm records.

“Most financial institutions are always reluctant to lend to us. We are glad that Sokopepe linked us to a micro finance institution. We are now capable of accessing and managing credit," said Mr. Kabuari.

He said that Sokopepe has been training the CBO on record keeping, best agricultural practices, market information and linkages, and conservation agriculture.

“The training has equipped us with agribusiness skills. The knowledge is helping our members to track their agribusiness enterprises and expenses. This will help us to use the Kilimo Bora Loan which we expect to receive soon,” said Mr. Kabuari.

Members of the CBO being trained on financial literacy

Mr. Mureithi has been visiting the group every week to check on the progress of their crops. He has also been assisting individual members in filling their farm book.

He said that Sokopepe has enabled the CBO members to plan their farm enterprises. They are able to know the enterprises that ‘are eating’ into their profits.

The CBO has been engaging in forest management and conservation of Timau Forest for 9 years. The CBO has a Forest Management Agreement with the Kenya Forest Service (KFS). Through the agreement, KFS issued the group with 1.5-acre land for farming.

The group is playing an important role in forest restoration and agroforestry. This is helping to restore healthy, diverse, productive, and sustainable land-use systems.

The group has integrated apiculture with other farming activities. The CBO's 19 beehives are helping in pollination of plants, trees, fruits, and crops. This ensures the improvement of yields as well as promoting environmental conservation.

Mr. Kabuari noted that apiculture enables them to get income from honey, bees wax, pollen, propolis, bee colonies, bee brood, queen bees, and package bees.

The CBO also owns a tree nursery that produces at least 4,000 indigenous tree seedlings and around 3,000 exotic species. The CBO has been planting trees in Timau Forest, individual farms, education facilities, riparian and government land.

They have been donating seedlings to Water Resource Users Association (WRUA), schools, hospitals, and government departments. They are also selling to individuals. Exotic trees retail between Ksh 10-15 while indigenous trees retail at Ksh 25-50.

Difficulty in accessing credit facilities has hindered the productivity of most smallholder farmers. Sokopepe is keen on financial inclusion, as it would ensure increased income for farmers.