Loan offered to large scale farmers to enable them access farm inputs, working capital, farm equipment and other social needs e.g. school fees, medical bills, furniture etc.
- Maximum debt ratio of 50% of gross margin.
- Proof of viable market or existence of a warehouse receipt arrangement for products whose inputs are to be funded.
- Minimum earnings and positive cash flows from farming of grains of 2 years or 4 seasons.
- Borrower must be the owner of or lease of land used for production of the grain. Lease tenure should be more than tenure of loan by at least one year
- Borrower must demonstrate ability and willingness to take life insurance and assign it to the bank for a sum insured not less than the loan amount.
- Borrower must demonstrate ability to meet other costs of producing
- Borrower must be willing to open and operate account with co-operative bank for disbursement/ remittance of proceeds and debt servicing.
- Borrower must provide the following minimum documents for determination of repayment ability
- Amounts up to Kshs.10,000,000, bank accounts statements, production and earnings trend analysis and cash flow forecasts
- Amounts exceeding Kshs.10, 000,000- audited accounts or statement of affairs + income and expenditure statements, production and earnings trend analysis, bank account statements and cash flow forecast.
- Borrower and marketer/buyer/warehouse demonstration willingness to execute tripartite agreements where possible.
- Borrower demonstrating willingness to issue irrevocable instructions to buyer /warehouse to remit all payments in respect of produce to borrower’s account with us.
- Land size should be greater than 5Ha.
- Loan Amount: from Kshs. 300,000 to 15,000,000
- Interest rate: Base + 1% p.a.
- Application fees of 1% of loan amount
- Appraisal fees of 1% of loan amount
- Maximum tenor of 12 months
- Acceptable security will be a mix of:
- Legal charge to cover 60% of loan amount
- Acceptable chattels e.g. farm machinery & equipment whose forced sale value cover minimum of 150% of portion of loan to be covered by chattels
- Debenture covering all of the assets of the borrower
- Insurance cover over death and disability if borrower is an individual with minimum sum assured of loan amount with the bank’s interest noted
- Farm input must be direct to the input supplier.
- Farm machinery must be directly to equipment dealer
- Social needs e.g. school fees and other domestic use must be credited to customer account with Co-op Bank.