Farmers might lose Sh1.9bn after bank shut
A small scale tea farmer in Kakamega county of Western Kenya. PHOTO | FILE
What you need to know:
Amount deposited in a Chase Bank account run by the Kenya Tea Development Agency (KTDA).
Bank was set to finance the agency’s small hydro-power projects to the tune of Sh820 million.
The agency also had Sh2.93 billion in Imperial Bank Ltd, which went down in October 2015.
More than 550,000 small-scale tea farmers might lose Sh1.9 billion following the recent closure of Chase Bank.
The amount had been deposited in a Chase Bank account run by the Kenya Tea Development Agency (KTDA).
The agency, which is owned by 54 tea companies that collectively run 66 tea processing factories, had picked the financial institution, believing that it was the safest option for depositing the farmers’ money.
KTDA Group Chief Executive Officer Lerionka Tiampati said the agency “was among the affected depositors and in total the group had Sh1.9 billion when the bank was placed under receivership”.
HYDRO-POWER PROJECT
The bank was set to finance the agency’s small hydro-power projects to the tune of Sh820 million.
It was a case of lightning striking twice at the same place as the agency had Sh2.93 billion in Imperial Bank Ltd, which went under in October last year.
Although KTDA processed the farmers’ second payment last year and met its financial obligations, the future looks bleak for the hundreds of thousands of farmers unless Chase Bank is bailed out.
