A new dairy credit financing model is giving anyone interested in dairy farming easier ways of owning a cow, a move that has gained impressive traction in the country on the surging interest in commercial agribusiness.
Dubbed Dairy Loan and offered by Kenya Women Finance Trust Deposit Taking Microfinance (KWFTDTM), the loan targets those already in dairy farming, prospective dairy farmer while also enticing young people who sees dairy as an agribusiness venture.
The financial institution gives the cow owner the leeway to choose a cow of their choice which is then followed by the client collecting and filling a proposal form, valuation form and a claim form. The claim form is filled by a veterinarian who examines the livestock before the institution can commit to financing the prospective dairy farmer. The client is allowed to pick a veterinarian of their choice. The vets write a report to help determine the actual cost of the cow and KWFT pays the suppliers.
Together with the proposal form the client presents their intention to get a loan to purchase the cow. The loan application form is filled and reviewed by the unit committee. Applicants can rest easy with the assurance of the many benefits to be accrued from investing in the dairy sector via the KWFT Dairy Farming Loan which, quick loan processing, flexible repayment period and insurance for the cow.
The credit facility has revolutionized dairy farming through provision of improved breeds with which have boosted milk yields. This, coming at a time when studies have shown that superior cow breeds are key in boosting household and national incomes for a sub sector primed among key drivers of the economy.
And to further insulate farmers from any eventuality like drought or theft, the financial institution insures the cow after purchase. The KWFT Dairy loan has also made it easy for women to access credit. Kenyan women make 80 percent of all farmers in the country according to the World Bank yet challenges like ownership of land and access to finances means that they never get to enjoy the fruits of their labour.
The facility has offered low to nil chances of defaulting since the dairy farmers use proceeds from milk sales to repay the loan and the cow is itself collateral. A thorough research is also done on the client to ensure that they are credit worthy through Know Your Customer (KYC) tests conducted by KWFTDTM credit officer through farm visits.
The dairy farming business has offered Kenya Women Finance Trust DTM the perfect entry point because of the many returns it offers to farmers through value addition. From it families are assured of nutritional value through guaranteed supply of milk and manure replenishes farms allowing increased production. Biogas has been key in providing lighting and cooking solutions at a time when 90 percent of Kenyans are not connected to the national grid and rely on firewood as a source of cooking which is taking a toll on Kenya’s ecosystem.
Those already in the business are already being trained on making bio slurry for their farms and ensure green environmental friendly ways of farming. The loan product that was as a result of intensive market survey has adequately addressed market gaps going by the tremendous uptake in the wake of reports showing dairy farming as a high return investment for those interested in agriculture.
According to a study dubbed the Contribution of Livestock to the Kenyan Economy by the Inter-Governmental Authority on Development (IGAD) Livestock Policy Initiative (LPI), milk is far and away Kenya’s most economically important livestock product, with a value of Sh257.811 billion Sh in 2009, or about 70 percent of the total gross value of livestock’s contribution to the agricultural sector. Officially recorded milk production was only about one twentieth of total re-estimated milk production in 2009.
The study has also scaled up the huge benefits livestock provide for the rural dairy farmers who keep 85% of the livestock in Kenya with the previously stated benefits of milk and meat now being supplemented by including manure from livestock for fertilizing crop field, traction for pulling ploughs, and serving as a means of savings and credit and insurance.