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Othaya Dairy risks closure over debt of KES.5.7 million to KCB

07 February 2014, 22:48 Joseph Njung’eh

Nairobi - Othaya Dairy Farmers’ Cooperative Society has been given an ultimatum of two weeks to pay a debt of KES.3.9 million owed to Kenya Commercial bank.

According to the society’s chairman, Josphat Gitahi the cooperative society has been given up to February 21, this year to have settled the debt or see their storey building in Othaya town auctioned.

He noted that the debt was incurred in the year 2000 when the then managing committee took a loan of over KES10 million and issued the building’s title deed to the bank as collateral to acquire the loan.

He said the society also owes its members a KES.5.7 million debt of unpaid dues which he noted that they had accumulated for years adding that following the debts, many farmers have deserted the society.

“As a result we have lost many members and we are receiving only 80 litres of milk per day unlike other years where we used to get thousands of litres,” Gitahi added.

The chairman noted that the members who owe the dairy firm and who are responsible for incurring the debts have a pending case in court.

He said the current management took over the society on June 28, 2012 as a commission to revive the Dairy Society and they wrote letters to former president Mwai Kibaki explaining the challenges they were facing.

However, two months before Kibaki left office, he had promised that treasury would settle their KES 10.1 million debts owed to the bank and the farmers but the pledge was never fulfilled.

The chairman said their efforts to seek assistance from Othaya MP, Mary Wambui and the county governor, Nderitu Gachagua, in regard to the debts had failed though they had vowed to help them but up-to-date have not met their pledges.

Gitahi added they have also tried to get help from the Constituency Development Fund (CDF) requesting for funds to clear the debts but they have not received any help.

“We know that some county governments are assisting their local cooperatives and wonder why ours does not assist us,” he said.

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