Small-scale farmers have been urged to venture into other Small and Medium Enterprises (SMEs) to enable them access loans.
Speaking at a workshop in Nakuru, Naphtali Makori, a loan manager at K-rep Bank, said most financial institutions only give financial support to large-scale and not subsistence farmers.
“Financial institutions find it difficult to give loans to farmers because most farming activities take too long to generate income. Also, majority of the farmers generate income once or twice a year,” he said.
He said another habit which hinders small-scale farmers from getting loans from banks is lack of records.
“Most small scale farmers do not keep records of their farming activities. Inputs and expenses records are not usually available and as a result, it is not easy to ascertain the profitability and cash flow of a farmer,’’ said the loan manager.
Giving an example of maize, he said it takes between four to seven months from planting to harvesting depending on the variety planted and location of the farm. “Since income for farmers takes too long and it is only realised after harvesting, banks find it difficult to support such unreliable enterprises,’’ he told the farmers. Makori added that even poultry farming is not easy to loan money since broilers take about five months and that depends on absence of diseases.
"This then means that in the intervening period, the farmer has no reliable income that the bank can depend on to pay the loan,’’ said the manager.
He urged farmers to manage their farming activities just like any other business for them to be considered credit worthy by banks.