Banks reject farmers' NCPB receipts as loan security

By KIPCHUMBA KEMEI

The much-hyped warehouse receipting system introduced by the National Cereals and Produce Board to enable farmers’ access bank loans has run into problems.

Financial institutions in Narok and Eldoret have declined to honour the receipts as collateral.

NCPB introduced the system where farmers deliver their maize and wheat in bulk to the board and are issued with the receipts, which are supposed to be used to borrow money for seedbed preparation in a pilot project introduced in Narok and Eldoret.

A survey by The Standard reveals all banks and other financial institutions, including the Agricultural Finance Corporation, have turned away farmers with the documents.

The disappointed farmers wanted commercial credit to prepare their land and buy farm inputs in readiness for the February-April planting season. The project was launched in Narok in October by NCPB chairman Jimnah Mbaru and the board Managing Director Joseph Misoi.

Storage fees

Prof Misoi said yesterday farmers in Narok have delivered 23,000 bags of maize under the arrangement.

Under the scheme farmers deliver their produce, a minimum of 100 bags, to the board and are issued with the receipts to use them as collateral.

The produce is held at the board silos until prices improve in the market for the board to offload them. After deducting the storage fees, farmers are given back their money.

Mbaru said 110 warehouses and silos would be certified to take the grains across the country under the initiative. He said delayed payments by the board in the past had compromised the country’s food security and asked farmers to take advantage of the initiative.