International Finance Corporation backed agency to rate cooperative societies

An agency backed by the International Finance Corporation (IFC) has developed a formula that rates agriculture focused cooperative societies and small scale businesses. This is expected to make it easier for the cooperatives and their members to access loans and social investors’ funds.

SCOPEinsight, the company also supported by the Embassy of Netherlands, says the rating system identifies strengths and weaknesses of a cooperative with an intention of linking them with training firms and consultants to facilitate and prepare them get financial support. The rating system is expected to increase the share of loans that go to agriculture, said the head of company’s Kenya operations Geoffrey Nyamota.

“By providing insight into key strengths and weaknesses of producer organisations, we stimulate business transactions with lower information costs and reduced financing risks,” said Mr Nyamota. Among the cooperatives the company has worked with is Muki Farmers Cooperative Society in Nyandarua.

“After participating in our assessment, they worked on their systems through a new strategic plan. They have since increased milk delivered by farmers from 2,000 litres per day to more than 11,000 litres a day,” he said.

The agency administers agribusiness assessments to farmers’ organisations or producer organisations and SMEs. Cooperative societies use these reports to identify their gaps and through this look for partners to fill the gaps. Once the gaps have been filled, they use the profiles to access finance for their agricultural activities.