THE PROBLEMS ENCOUNTERED AND RECOMMENDATIONS ON THE OPERATION OF A CREDIT REVOLVING FUND FOR SMALL SCALE FISH FARMERS
	TABLE OF CONTENTS

by

Pamela Achieng
Aquaculturist
Lake Basin Development Authority

FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS

UNITED NATIONS DEVELOPMENT PROGRAMME

BELGIAN SURVIVAL FUND

DEVELOPMENT OF SMALL SCALE FISH FARMING IN THE LAKE BASIN REGION, PHASEII

LAKE BASIN DEVELOPMENT AUTHORITY

KISUMU, KENYA.

June 1995

PREPARATION OF THIS DOCUMENT

This document presents the outcome of a Credit Revolving Fund for Fish Farmers in the Lake Basin Region of kenya. The work was carried out in 1995 in Kisumu, kenya, under the auspices of the Lake Basin Development Authority in collaboration with the UNDP / BSF / FAO Project KEN/86/027, “Development of Small Scale Fish Farming in the Lake Basin Region, Phase II”. It is hoped that this document will assist workers involved in operating credit schemes in the field of African Aquaculture, and who may also face similar situations.

The analysis leading to the outcome of this document was done by Ms Pamela Achieng, Aquaculturist, under the guidance of the Chief Technical Advisor to the Project (Mr D Campbell) and the National Project Coordinator (Mr J Ochieng).

This document is one of the several documents prepared during the course of the project identified on the title page. It is considered to be of general use and meant for distribution both within Kenya, and without. The conclusions and recommendations given in the document are those considered appropriate at the time of its preparation. They may be modified in the light of further experiences gained during the subsequent stages of the project.

The designations employed and the presentation of the material and maps in this document do not imply the expression of any opinion whatsoever on the part of the United Nations or the Food and Agriculture Organization of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

Achieng, P. 1995.
The Problems Encountered and Recommendations on the Operation of a Credit Revolving Fund for Small Scale Fish Farmers in the Lake Basin Region, Kenya.
KEN/86/027. Field Document No. 2. FAO.

ABSTRACT

This document presents the problems encountered and recommendations of a Credit Revolving Fund for Small Scale Fish Farmers in the Lake Basin Region of Kenya. The credit scheme is being undertaken by the Lake Basin Development Authority in collaboration with the UNDP/BSF/FAO Project, “Development of Small Scale Fish Farming in the Lake Basin Region, Phase II”. The scheme began operating in August 1991, and its main objective was to promote fish farming in the Lake Basin Region of Kenya by assisting the small scale fish farmers to obtain credit to expand their fish culture activities. The scheme had 3 phases. During the first phase, loans were disbursed in cash. However, during the second and third phases, loans were disbursed in kind. Although the scheme has to-date disbursed KSh 3,923,265 to 386 small scale fish farmers, it has recovered KSh 487,156, which only amounts to 12.4% of the total loan disbursed. On one hand, the scheme has not been a success due to the low repayment rate, which can be attributed to several factors, some among them being drought, rise in the cost of feed and lack of training. On the other hand, the scheme has created an impact of awareness on the benefits of fish farming in non-traditional fish farming districts, especially Nandi and Kericho Districts. For this scheme to continue, it is suggested that the Project divorce itself as much as possible from loan recovery, and place an onus of repaying on the farmers. It is also recommended that future loans be only directed to Fish Farmers Associations / Groups. The principal aim of this document is to share with workers involved in the field of African Aquaculture, the experiences of operating such a scheme. It is expected that the findings and recommendations in this document will provide the reader with ideas for establishing a sustainable fish farming industry.

Hyperlinks to non-FAO Internet sites do not imply any official endorsement of or responsibility for the opinions, ideas, data or products presented at these locations, or guarantee the validity of the information provided. The sole purpose of links to non-FAO sites is to indicate further information available on related topics.

This electronic document has been scanned using optical character recognition (OCR) software. FAO declines all responsibility for any discrepancies that may exist between the present document and its original printed version.

TABLE OF CONTENTS

LIST OF ABBREVIATIONS

1. INTRODUCTION

1.1 Background of Project Region
1.2 Project Description
1.3 Status of Fish Farming in the Lake Basin Region

2. HISTORY OF THE CREDIT REVOLVING FUND

2.1 Phase I

2.1.1 Eligibility and Selection Criteria
2.1.2 Use of Credit
2.1.3 Credit Approval Process
2.1.4 Disbursement of Credit
2.1.5 Loans Disbursed and Recovered
2.1.6 Observations

2.2 Phase II

2.2.1 Eligibility
2.2.2 Administration Procedures
2.2.3 Application and Approval Procedures
2.2.4 Disbursement of Credit
2.2.5 Loans Disbursed and Recovered
2.2.6 Observations

2.3 Phase III

2.3.1 Loans Disbursed and Recovered
2.3.2 Observations

3. DISCUSSION

4. CONCLUSION

5. RECOMMENDATIONS

BIBLIOGRAPHY

List of Tables and Figures

Tables

1. Number of active Farmers and Ponds on Data Base

2. Phase I - Overall Status of Loans by District

3. Phase II - Overall Status of Loans by District

4. Economic Model 1

5. Economic Model 2

6. Phase III - Overall Status of Loans by District

7. Phases I to III - Overall Status of Loans by District

Figures

1. Location of the LBDA Area

2. Phase I - Loans to Individuals

3. Phase I - Loans to Groups

4. Phase II - Loans to Individuals

5. Phase II - Loans to Groups

6. Phase III - Loans to Individuals

7. Phase III - Loans to Groups

8. Phases I to III - Loans to Beneficiaries

LIST OF ABBREVIATIONS

Figure I: LAKE BASIN DEVELOPMENT AUTHORITY AREA OF OPERATION