KCBL Bank - Kilimanjaro Cooperative Bank
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Warehouse receipt system

The KCBL is proud to be a founder of this system after realizing that it is not possible for an ordinary farmer to have a mortgage and obtain a loan from the Bank and as a result one of its activities currently is the coffee financing arrangement between KCBL and the Agricultural Marketing Co-operative Societies (AMCOS) also known as Rural Co-operative Societies (RCS). Under this arrangement, the RCS access funds for the coffee collections without the conventional collateral commonly used by other financial institutions. The only collateral required by KCBL is the coffee produce that farmers have and good leadership of the Society.

Procedures under Warehouse Receipt System

  • Members meeting are organized by Rural Cooperatives Societies also known as Agricultural Marketing Co-operatives Societies (AMCOS) to deliberate on the amount to borrow from KCBL in that particular season.

    Minutes of the meeting are forwarded to Regional Co-operative Officer to get Maximum Liability Certificate (MLC).

The Society forward overdraft application to the Bank with the following attachments:

  • •    Overdraft application letter indicating amount and purpose.
    •    Maximum Liability Certificates from Regional Cooperative Officer.
    •    Audited financial statements for the previous year.
    •    Minutes of members meeting which authorized borrowing from KCBL.
    •    Cash flow projections indicating coffee collections and Sales for that particular season.
    •    Bank receives overdraft applications and prepares contracts which will be signed by both parties. The contracts include overdrafts agreement, letter of hypothecation of goods and guarantee forms.

    The society will write a letter to Warehouse operator allowing the coffee to be cured and sent to Tanzania Coffee Board for auction where by another letter is written to Tanzania Coffee Board asking to channel all RCS’ coffee proceeds to the respective account at KCBL.

Benefits of Warehouse receipt system to farmers

  • •    Flexibility to borrow money when needed.
    •    Buy the produce at the right time and place
    •    Farmers can improve the quality of their produce and sell them at the right price.
    •    Farmers can access funds/loan before selling their produce and make use of their produce as collateral for the loan.
    •    Coffee price has improved for farmers under this system.

General requirements to obtain a credit facility

  • A KCBL customer who has a desire to apply for a loan in the institution must fulfill the below requirements before writing application letter.
    •    Must have at least 3months well serviced saving account according to his or her business operations.
    •    Must have a continued/existing registered business/economic project.
    •    Must have a collateral (registered immovable property /house with deed) to secure his/her loan.
    •    Must have good history in other Financial Institutions.
    •    Visit to his /her business site and collateral.

    Coupled with the above requirements later the client will need to submit the  following documents:
    •    Audited accounts of his business
    •    Valid insurance for his/her collateral /property.
    •    Land rent for his/her collateral
    •    Fill the Spouse/Owner’s Consent form
    •    Register his /her collateral in favor of  KCBL.

    Without delay ,a client will get the loan as soon as possible after he/she completed the above requirements and documentation.

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