Co-operative Bank of Kenya has signed a Sh. 500 million financing deal with leading fertiliser Company Yara East Africa Limited, that supplies Yara fertilizers.
The new deal will facilitate fertilizer distributors across the country purchase and restock their outlets. It will see Sh. 62 million being released immediately to the Yara fertilizer distributors who have already applied for the scheme.
Yara distributors are now required to open MSME Account with Co-op Bank to access the funds. The five-year Distributor Finance Scheme will enhance fertilizer access by farmers hence boosting the much-needed food production in the country.
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According to Co-op Bank’s acting director Corporate and Institutional Banking, Jacquelyne Waithaka, it was important to provide financial support to input distributors if the country is keen at realizing its agenda on food production.
“The Agro-Distributor Finance Scheme will help distributors and agro-dealers of Yara fertilizers to thrive in the dynamic business environment. The distributors can borrow up to a maximum of Sh. 20 Million to finance purchase of their fertilizer stocks from Yara East Africa,’’ she said.
Following this new deal, distributors will enjoy negotiated banking terms, with a disbursement fee of two per cent being the only charge. “In addition, an overdraft with an expiry period of 180 days (6 months) and payment upon utilization of the overdraft will be due within 45 days,” Ms. Waithaka added.
This finance scheme is the latest in a series of arrangements by the bank which are aimed at opening financing opportunities to individuals and small business owners in Kenya.
According to Yara Country manager for Kenya, William Ng’eno, the new financing program will enable farmers to access the various Yara fertilizers brands with ease and in turn boost fertilizer use to increase soil fertility, promoting increased food production. ”This project will enable distributors to increase their stock, to meet the high demand for fertilizer during this short rain planting season and beyond,’’ he said.