Milk farmers to get paid after a day, not month
A start-up company has come up with a service that will ease access of finance by small scale dairy farmers.
Umati Capital hopes to enable thousands of farmers, individually or through their cooperative societies, access payments only after a day for milk delivered as opposed to one month.
The lending service will be supported by mobile money and the loans by the farmers will require no collateral.
Instead Africa Trade Insurance Agency (ATI) will enable Umati Capital lend to farmers by offering credit risk insurance.
During the launch of the partnership, Ivan Mbowa, co-founder Umati Capital said they were eager to partner with businesses across agriculture, the hotel industry and manufacturing to find innovative ways of structuring financing solutions.
Speaking at the same occasion, ATI’s Rennie Kariuki said Umati Capital’s model was a viable way for ATI to support two important sectors of the economy simultaneously: agriculture and SMEs.
Umati Capital hopes to cushion farmers from the high interest rates that bank loans accrue and the heavy collateral requirements.