Nafaka Loan Small-scale
Loan offered to small scale farmers to enable them access farm inputs for production of cereals which include maize, wheat, barley, sorghum, rice and millet among others.
- Individual must be a farmer engaged in viable production of maize, wheat, barley, rice, sorghum and millet on a small scale.
- Must be residents, should be the owners of land used for production and for leased land it should be two (2) years prior to expiry.
- At least 12 months in operation (2 seasons of grain production), with positive net cash flows.
- Must be willing to open and operate account with Co-operative Bank for channeling the disbursement and repayments
- Maximum debt ratio of 50% of Gross income (income from farm, employment or other businesses as evidenced by bank account turnovers and farm gross margin analysis).
- Must have life insurance on the life of borrower (sum assured pegged on the loan amount).
- Land size should be between 1 Ha & 5Ha
- Loan Amount: from Kshs.20,000 to 300,000
- Interest rate: base +1 %
- Application fees of 1% of amount requested, minimum Kshs 500
- Appraisal fees of 1% of amount requested, minimum Kshs 1000
- Maximum tenor of 12 days
- Security should be chattels whose forced sale covers minimum 150% of loan.
- Insurance over death and disability with minimum sum assured of loan amount with the banks interest noted.
- Irrevocable instruction to the buyer to channel all proceeds through the bank and/or proof of market e.g. positive cash flow.
- Disbursement must be direct to the input supplier.