Yara inks US$4.6m agro-financing deal with Co-operative Bank of Kenya

KENYA – Yara East Africa, agro supplier of crop nutrition solutions and precision farming offerings has signed a Ksh500 million (US$4.6m) financing deal with Co-operative Bank of Kenya to enable the organization’s fertilizer distributors restock their outlets with ease using the backing of a dedicated kitty.

The Distributor Finance Scheme launched is a five-year partnership that kicked off with Ksh 62 million (US$571k) being released to the Yara fertilizer distributors who have already applied for the scheme, reports The Star.

The overall goal of the Agro-Distributor Finance Scheme, according to the reports is to enhance fertilizer access by farmers hence boosting the much-needed food production in the country.

“This financing program will enable farmers to access the various Yara fertilizer brands with ease. This in turn will boost fertilizer use to increase soil fertility and thus promote increase in food production across the country,” said Yara Country Manager for Kenya, William Ng’eno.

”This project will enable distributors to increase their stock, to meet the high demand for fertilizer during this short rain planting season and beyond,’’ he added.

Yara has also indicated it will give a 3% discount to distributors making purchases under the scheme.

In order to access the funds, Yara distributors need to open MSME Account with Co-op Bank.

Co-op Bank’s acting director Corporate and Institutional Banking, Jacquelyne Waithaka, said it was important to provide financial support to input distributors if the country is keen at realizing its agenda on food production.

Agriculture is the cornerstone of Kenya’s economy, with the sector accounting for 33 per cent of the country’s Gross Domestic Product (GDP).

“The Finance Scheme we have launched today will help distributors of Yara fertilizers to maintain their desired stock levels for fulfilling the requirements of their customers, enabling them thrive in the marketplace,” Waithaka said,

The distributors can borrow upto a maximum of Ksh 20 million (US$184k) to finance purchase of their fertilizer stocks from Yara East Africa and are set to enjoy negotiated banking terms, with a disbursement fee of 2% being the only charge.

“In addition, an overdraft with an expiry period of 180 days (6 months) and payment upon utilization of the overdraft will be due within 45 days,” she added.

In neighbouring Tanzania, Yara has launched an initiative dubbed ‘Action Africa’ targeting to distribute 12,500 tons of YaraMila Cereal fertilizer worth Tsh 16.5bn (US$7.1m) for free to 83,000 farmers.

The initiative is aimed to enable mostly rice and maize farmers increase their production in a bid to ensure food security in the country.

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