Use coffee funds well, MPs urge banks

Financial institutions have been asked to ensure prudent use of coffee waiver funds given by the Government to bail out farmers in coffee growing areas.

Legislators Elias Mbau (Maragua), Mr Muturi Mwangi (Kiharu) and Mathioya’s Clement Wambugu, members of Parliament from Murang’a, have asked lending institutions that received cash from Treasury last year to ensure that the amount was used for the right purpose.

The ministry of Finance released Sh1 billion last year, to take care of debts coffee farmers especially from counties in Central, Eastern and Western regions owed their respective unions and societies.

“Let the institutions that received the money know that we want results and they should not trade with government money,” Mr Mbau said last week during an Education Day in Kiharu.

The Maragua MP who is also the parliamentary Budget Committee chairman said he was concerned with the distribution of the kitty.

The law makers demanded transparency in the manner in which government waiver to coffee farming lending institutions were distributed to farmers.

The debts, which had accumulated up to Sh3.7 billion, were to be eased in three phases with the first one being December last year and subsequent ones in January and March this year.

The amount was loaned to farmers more than 10 years ago through various cooperatives as working capital and farming relief, but had accumulated over the years forcing farmers to cut down coffee trees and abandon the practice all together.

Central was to receive Sh797 million, which accounted for 27 per cent of the total debt with Murang’a County receiving Sh267 million through and an additional Sh99.7 million.

Kiambu Coffee growers received Sh36 million, Nyeri’s Taifa Sacco was awarded Sh123 million while Kirinyaga District Coffee growers got Sh161 million.

Other included Kirinyaga Farmers Union which got Sh107 million, Mathira Farmers Sacco got Sh4.2 million while Gichugu Farmers Sacco receive a total of Sh2.5 million.

The legislators warned that should the institutions fail to take care of the funds, they would block the release of the remaining phase and any other future efforts to revive the sector.