It’s pay season in Bomet, but most families can hardly smile

By CHARLES NGENO

When Christine Bett of Mogogosiek Location in Bomet County convinced her husband that they borrow from a micro-finance company, her reasoning was that she was going to open a restaurant with the loan.

Her husband was hesitant but later conceded to her wish. They used their motorbike, land title deed and their two dairy cows as collateral for the loan.

When she received the Sh100,000 loan, she felt the amount was too much. With her little background in financial management, she began purchasing expensive clothing for her family and furniture for her recently completed house. A friend also borrowed Sh20,000 from her and within three days, she had only Sh30,000 left.

Of course she did not start her restaurant business yet she had a loan to repay. She was expected to remit Sh9,000 for 18 months.

A month later, the micro-finance was threatening to auction their two dairy cows and the motorbike because she had defaulted in repayment. They had only one option: lease their two acre tea bushes.

Such is the scenario for several tea farmers who approached lending institutions in Bomet County. The much publicised bonus season may not mean much to them.

According to Mogogosiek Location Chief David Langat, most households have been forced to lease their tea bushes because they approached banks and other lending institutions without first being trained on how to invest their loans.

“We have had cases of family property being taken for auctioning by micro-finance companies because those who had been loaned had failed to honor their monthly repayment. A few rich people have taken advantage of their predicament to buy their tea leaves at very low prices,” said Langat. He said those willing to help the defaulters  have been buying a Kilo of tea at Sh25. He added that farmers ultimately lose more than Sh20 per kilo in such an arrangement.

Sot Tea Growers Saving and Credit Society CEO Leonard Sang agreed that most farmers will not be earning much during this bonus season since most committed theirs in loans.

“The 12,000 members in our Sacco owe us more than Sh170 million which we shall be deducting from their bonuses.  Most of them will be going home empty handed,” said Sang. He said they have been forced to limit the farmers borrowing since some will borrow beyond their expected amount. He opined that loans have boosted the farmers because a majority of those borrowing have been using the loans to finance their children’s education. “We are sure that once these farmers clear their loans most of them will be in the loans office committing next year’s bonus in more loans. If we would not have released the loan forms they will be going for advances recoverable at the end of the month,” said Sang

Former Mogogosiek Factory Board of Directors chairman Ronald Ngeny concurred that the much talked about bonus boom is unnecessary since farmers committed it in loans that go to school fees. “Most farmers are in Saccos such as Greenfedha, Sot Tea, Konoin Tea Sacco and Litein Tea Sacco. Farmers have borrowed from their Saccos because of the high interest rate charged by commercial banks,” said Ngeny.

He refuted claims that there has been an influx of prostitutes in the area because of the anticipated pay. He appealed to lending institutions to educate farmers on how to invest their loans to avoid cases of misappropriation by farmers.

Mogogosiek Factory Unit Manager Christopher Maina said the factory’s handling capacity has been overstretched because of increased tea plantations.