KTDA Chairman Dismisses Claims That Factories Borrowed Loans to Pay Farmer' Bonuses

By BRIAN MUSYOKA 

Speaking at Nica Kithare Church, Njeru said although tea factories do borrow money, the loans are obtained for various purposes, including factory operations, capital investments and expansion projects, and should not automatically be linked to farmers’ bonuses.

He said it was misleading to claim that factories have been borrowing loans to pay farmers their bonuses, noting that the financial position and borrowing needs of individual factories differ.

Njeru explained that some factories, particularly in the West of the Rift, may occasionally require financing to bridge cash-flow gaps arising from low tea absorption at the auction and weaker prices. However, he maintained that this should not be generalized to all tea factories.

He cited Rukuriri Tea Factory as an example, saying it secured a Sh150 million loan to facilitate the installation of orthodox tea processing machinery. He dismissed claims that the factory has a Sh300 million loan, saying the Sh150 million facility is almost fully repaid.

Njeru said most factories in the East of the Rift have stronger financial capacity to meet their operational costs and farmers’ payments while also investing in projects aimed at improving efficiency and increasing returns to farmers.

His remarks come amid claims that farmers could receive a lower bonuses because factories were allegedly still servicing loans taken during the previous payout.

Njeru maintained that borrowing by a tea factory should not automatically be interpreted as borrowing to pay farmers’ bonuses, insisting that each factory’s financial position should be assessed on its own circumstances.

He also called for patience as investigations into the Sh322 million fertilizer transaction continue, saying the outcome of the Directorate of Criminal Investigations (DCI) probe will establish the facts surrounding the matter.

Njeru reiterated KTDA’s commitment to transparency, sound governance and safeguarding the interests of tea farmers.