Livestock farmers and businesses can get loans from Kenya Livestock Finance Trust

Written by Beatrice Wendoh.

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Livestock enterprises can access loans for their farming or business activities through the Kenya Livestock Finance Trust (K-LIFT). K-LIFT was established in 1994 with a goal to contribute towards poverty alleviation and food security through supporting livestock enterprises access to affordable credit. K-LIFT does this by giving loans to entrepreneurs that make a living through the different livestock enterprises. The loans are towards working capital or assets financing that will contribute to the growth of livestock business.

Specific Products from K-LIFT

  1. Loans to animal health service providers such as veterinarians, animal health technicians and livestock officers
  2. Loans for setting up sales and distribution of Agrovet products. Ensuring availability of quality inputs such as veterinary drugs and vaccines, animal feeds etc. to a financially empowered value chain in livestock production, will no doubt contribute to creation of wealth in the livestock rural enterprises.
  3. Loans to livestock farmers. This include livestock farming, ranching, poultry production, pastoralists, beekeeping and breeding of animals.
  4. Loans for purchasing of dairy animals. This is a special product targeting farmers who want to own good quality dairy animals. The farmers can approach K-LIFT either as individuals or as groups of farmers:

As individuals

  1. To buy 1 – 3 animals (max KES 200,000)
  2. Loans must be in form of animals
  3. Animals must be certified by a qualified veterinarian on
  4. Health status
  5. Not more than 2 calvings
  6. In-calf or milking
  7. A producer of minimum of 20 litres of milk per day (Records availability or registration in a stud book)
  8. Loans secured through title deed
  9. Interest rates negotiable but competitive
  10. Payment period of a maximum of 36 months

Farmers in a group / cooperative societies

  1. Minimum of 15 farmers in the group. Group must have been in existence for minimum of 6 months and registered with social services
  2. To buy 1 or 2 animals (Max KES 100,000) farmers must contribute 10% of the value of the animals upfront.
  3. B – c as above on individual application
  4. Applicant, a registered member of the group or dairy cooperative society and selling milk through the cooperative or the group
  5. Loan recovery through a check-off system from the cooperative society / group
  6. Animals must be ear-tagged, photographed and insured with CIC (K-LIFT to arrange)
  7. Group must ensure proper animal health care. Access to a qualified animal health provider. Access to a dip or have own acaricide spraying pump.
  8. Loan can be secured through group guarantee. Cooperative society or group to enforce this guarantee (No sale of animal before loan is repaid, milk must be delivered through the cooperative society or group)
  9. Interest rate negotiable but competitive
  10. Payment period – a maximum of 24 months

Loans to dealers of livestock products

Activities that involve processing of livestock products and in the process add value to them such as:

  1. Milk – establishment of marketing channels – collection, cooling, pasteurization, and sale of milk and its by-products
  2. Meat – construction of slaughter facilities, processing of meat up to the point of sale (butcheries etc.)
  3. Hides and skins – purchase of raw hide, processing to different stages up to manufactured products such as shoes, belts, wallets etc.
  4. Honey – purchase of beehives, processing of honey up to its packaging, and sale

Loans to manufacturers and distributors of animal feeds

  1. Purchase of machinery
  2. Purchase of raw materials
  3. Marketing expenses

Loans to the fishing industry

  1. Purchase of fishing gear
  2. Establishment of aquaculture

Loans to Livestock traders

To facilitate traders to buy beef animals from pastoralists and sell to Kenya Meat Commission or butchers

Livestock insurance

K-LIFT is an agent for Cooperative Insurance Company of Kenya (CIC) in offering livestock insurance. The premium is based on 4% of the value of the animals.

Factoring or invoice buying

Factoring or invoice buying is a specialized facility that is available at K-LIFT. It is available to those enterprises who sell their products to mainstream markets such as large milk processors, large butchers dealing with poultry or pig meat etc. but do not have the capacity to extend the 60 to 90 days credit that such buyers insist on. K-LIFT facilitates this by entering into a tripartite arrangement so that the supplier is paid by K-LIFT when the products are supplied and the buyer pays the invoiced value to K-LIFT after the agreed credit period.

How to access K-LIFT loans

Available to any person earning a living from the livestock sector:

Available to individuals, partners, companies, organized groups or cooperative societies in the livestock sector

  • A business proposal along K-LIFT guidelines
  • Proposals are available from K-LIFT agents (mainly agrovets countrywide)
  • Loans are only available strictly to livestock enterprises

Loan structure

Loan ceiling

The loan ceiling are negotiable and will depend on the type of product desired

First time loanees

This will vary from a ceiling of KES 50,000 to KES 500,000 depending on the risk profile of the applicant. After successful payment of the first loan, the ceiling will be KES 300,000 to KES 1.2 million depending on the applicant risk profile.

Repayment period

  • Short term loans = 3 to 12 months
  • Long term loans = 18 to 36 months

Interest rates

These are negotiable and competitive depending on the product

Security

There are various options

  1. Title deed for land or property in urban or rural area
  2. Chattels mortgage for motor vehicle, motor cycle or other immovable properties. This is accepted only as a top up to other securities
  3. Third party guarantee - A registered power of attorney should be obtained for such a guarantee.
  4. Shares from public quoted companies
  5. Livestock – in using livestock as collateral, the applicant must belong to a registered group of farmers as in (vii) below. The animal must also be insured with Cooperative Insurance Company of Kenya (CIC)
  6. Veterinary product stock in an Agrovet (Hypothecation). Agrovet must have been in stable business for a minimum of 6 months and keeping proper business records.
  7. Group guarantee – group must be registered with social services and will have existed for a minimum of 6 months. They must have a common bond of livestock keeping and marketing their produce through the group.

 

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