Avenews: agribusiness traders can use invoices, not land, to get credit
Kenyan agribusiness traders, processors and distributors are being urged to use sales records, invoices and payment histories to borrow. Avenews Kenya says agriculture gets only 3.2 to 3.6 percent of bank lending.
Lenders are looking beyond land and buildings when deciding who gets a loan. Agribusiness firms in Kenya are now being told to show documented sales, invoices and payment histories instead, Capital FM reported on Saturday. The shift could ease access to working capital along the agricultural value chain. Agriculture accounts for an estimated 3.2 to 3.6 percent of total bank lending, according to Avenews Kenya. That is small next to the sector's role in the economy. The gap hits businesses that move produce from farms to consumers. Without formal credit, they struggle to buy produce, pay suppliers and expand distribution. Avenews Head of Credit Joan Wanja said lenders can judge these firms by their verified transactions, accepted invoices and bank or mobile money statements. They need not rely only on the assets a business owns. "An accepted invoice from a reliable buyer is a good example. It is a payment already earned, waiting to arrive," Wanja said. Under invoice financing, eligible suppliers can receive up to 85 percent of an approved invoice's value before the buyer pays. The money keeps the business running between delivery and payment. The model comes with conditions. The buyer must be…
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