Edward Njeru owes his success to dairy farming. Although he started small, Njeru has gone on to increase his herd to 20 dairy cows. Out of these, eleven are currently producing about 240 litres of milk per day.

“I ventured into dairy farming in 2005. I set up my first dairy farming unit at my father’s compound,” he says.

To build a profitable farm, Njeru knew that he needed to acquire the right breed and have the right structures. “I started small but I knew that dairy farming is a capital-intensive venture. A good breed can fetch as much as Sh. 250,000 and above. Some breeds go for as high as Sh. 600,000. I needed to join a cooperative movement where I could pool my resources and access agribusiness financing down the line,” he says. Njeru joined the Co-operative Bank.

“I was very specific on my needs and this helped the financial advisors at the bank to direct my needs to banking services tailored for dairy farmers,” he says.

His earnings from his dairy farm went through his account at the bank. After saving for a while, he approached the bank with a financing proposal. “I wanted to acquire additional pure breeds as well as refurbish the dairy structure.” His initial financing was to the tune of Sh. 2 million.

Njeru has since received additional top-ups from the bank. His farm has also grown in tandem with his financial resources. The farmer has used his financing from Co-op Bank for his cows. He has also expanded his venture to include pig and poultry farming.

He has over 70 pigs and rears layers chickens. “I also produce animal feeds – to feed my animals and sell to other farmers,” he says.

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Esther Kariuki, the Head of the Department of Agriculture at Co-operative Bank, says for a financial institution, it is important that the farmer applying for the loan demonstrate that they are determined to succeed.

“As a financial institution, we do not just want to give farmers loans for the sake of it: we need to have faith that the farmer will repay the loan,” Kariuki says.

Co-op Bank has been at the forefront of supporting dairy farmers who have demonstrated their zeal to succeed. The lender has rolled out various products to address the challenges faced by dairy farmers, including bad weather, diseases, and unstable market forces.

Among the products is the Maziwa Plus Loan, which targets farmers seeking to boost production and value addition, acquire modern dairy farming equipment and improved animal breeds.

Through this product, dairy farmers can borrow up to Sh10 million with a maximum tenor of 60 months. The interest rate is charged at Base + 2% p.a. on reducing balance.

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The features of the loan are:

• Borrow up to Sh. 10 million
• Maximum tenor: 60 months
• Interest charged at Base + 2% p.a. on reducing balance
• Appraisal fee of 1%of the loan amount
• Annual review fee of 1% of the loan balance whose term exceeds 12 months.
• Collateral includes charge over movable/fixed assets of the group, landed property and guarantees. At least 30% must be tangible

To qualify for the loan, individuals, groups, and companies are required to:

• For Groups, they must be handling at least 500 litres per day
• Groups must have been in existence for at least 2 years
• Companies must have been in existence for at least 12 months
• Must provide security, at least 30% in tangible form
• Willingness to channel milk proceeds through the bank
• Personal Guarantee by the group officials is mandatory
• Group assets must be secured in the name of trustees (officials) with provisions on succession clearly spelt out in the group constitution