Sessional Paper No. 01 of 2002 on Restructuring of The Agricultural Finance Corporation (AFC)

Abstract

AFC is currently in a very poor financial state. As at 30th June 2000 its total net assets were Kshs.2.078 billion while it owed the Government and Sugar Finance Corporation a total of Kshs.10.3 billion on account of loans (Kshs.3.184 million) and accrued interest (Kshs.7.158 billion). The poor performance and financial performance is attributed to: The poor performance of the seasonal crop credit scheme; Liberalization; Write off of loans; Inability to enforce loan securities; negative interest rates; high overhead costs. In its meeting held in March 2002 the Cabinet discussed the proposed restructuring of AFC, and in view of the critical role played by AFC in poverty eradication and food security, through provision of farm credit, approved several financial and restructuring measure, which among other things, include…