Interest limit rule comes to farmers’ rescue

Farmers indebted to Agricultural Finance Corporation will not exceed double the amount they borrowed when repaying the debts.

Agriculture minister William Ruto appealed to farmers to take advantage of the new rule that limits the extent to which interests are charged on borrowed money to clear their arrears.

“Interests and principal amount should not be more than twice the amount borrowed. Those who have repaid by more than this set limit will pay one per cent of the amount borrowed and be cleared,” said the minister.

Mr Ruto made the remarks when he addressed farmers during this year’s Agricultural Society of Kenya (ASK) show in Eldoret, where more than 100 exhibitors turned out for the event.

He was accompanied by the ASK national chairman, Justice Stewart Madzayo, and AFC managing director Zakayo Magara.

The annual event has not been held for the last two years following the post-election violence that saw many internally displaced persons pitch tent at the showground, when they fled their homes at the height of the chaos.

Said the minister: “The initiative will save farmers who could have been good borrowers but who have turned out to be bad debtors due to previous interest charges, which kept on increasing without any ceiling.”

He said the government would finalise the necessary approvals to ensure the programme succeeded, to the benefit of many farmers, some of who are psychologically disturbed by the worrying interests their loans had accrued.

He appealed to the farmers to take advantage of the friendly lending rules and service their loans so that the funds would continue benefiting other needy cases.