Meru Dairy-A case study on financing the right way


On 15 August 2016, we opened doors to our Meru Branch not knowing it would set a precedent in agribusiness financing for us. Our ethos of partnerships and friendly financial solutions enabled us and our partners to grow in Meru Town.

As is with any business, expansion and growth requires some form of financing. The agricultural sector impacts many lives and remains one of the leading contributors to GDP growth in the country. Meru is an agricultural-rich region with farming activities ranging from dairy to crops. Employment opportunities in agriculture are larger than most industries as it is a labour-intensive activity.

For us at Credit Bank, this impactful nature of the sector resonates with our mission to maximise social impact of our financial solutions. Not only do we look at the traditional sense of the sector but further assess growth areas both vertically and horizontally. What this means is adding value to the agricultural sector through activities such as financing processing activities, suppliers and stakeholders along the value chain.

We have worked with several stakeholders in the region to ensure dreams come to reality for many. This holds true for everywhere we have a footprint – our focus remains to have positive social-economic impact of the communities we operate in.

The video below showcases our work with Meru Dairy Co-operative Union.

Our meeting with the union presented an opportunity for social-economic impact. Any form of financing solution we’d present to them would positively and directly impact the farmer. We gathered insights from Meru Dairy as to the demand for milk and milk products around the country. Capacity constraints however meant that meeting this demand was a challenge. What the union needed was financing to expand the factory as well as get new higher capacity equipment without affecting the cashflow to the farmers.

Through listening and understanding their requirements, we were able to craft a financing solution around their needs. Credit Bank financed Meru Dairy, in this instance, to the tune of 240 million enabling expansion. With these funds, the Union has been able to add a new block to the factory which houses two new production lines.

What this means is an increase in production throughput. Meru Dairy can now be able to satisfy the growing demand of milk and milk products. This further implies that the Union can be able to buy more milk from its farmers and encourage even more farmers to join. This creates employment within the community and families can now be able to meet their own financial needs. The new production lines have also increased product variety for Meru Dairy which includes cheese, various creams, yoghurt and even powdered milk.

Financing Meru Dairy’s operations is a testament to our mission; creating social economic impact that improves the lives of people in the communities we operate in. Our commitment to SMEs remains steadfast. With the relocation of our Eldoret Branch to a larger facility and convenient location, we will strengthen financing in agribusiness. Our focus is on financing activities in and around the value chain of agriculture.

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