The Cabinet has approved the waiver of interest and penalties on land settlement loans totalling Ksh12.3 billion.
In a statement released on Tuesday November 11, the Cabinet said that the waiver would benefit thousands of settlers in 520 schemes across 26 counties.
A land settlement loan is a type of government-issued credit designed to help landless or low-income individuals acquire and develop agricultural land within settlement schemes.
These loans, which were administered through the Land Settlement Fund Board, are provided to settlers to support farming activities such as cultivation, livestock keeping, and other infrastructure developments.
Beneficiaries were expected to repay the loans over time from the profits of agricultural production of the land.
The cabinet noted that the decision was made after recommendations from the Land Settlement Fund Board of Trustees, which had observed that many settlers in these settlements schemes have struggled to repay their loans due to economic hardship and low agricultural productivity.
"At the meeting, the Cabinet endorsed the waiver of interest and penalties on outstanding land settlement loans to ease the financial burden on low-income settlers and advance the Bottom-Up Economic Transformation Agenda," the Cabinet said.
"The decision follows recommendations by the Land Settlement Fund Board of Trustees, which noted that many settlers have been unable to repay accrued interest due to economic hardship and challenges affecting agricultural productivity," it added.
According to the dispatch, beneficiaries of the waiver will receive a 12-month moratorium, which will allow beneficiaries to settle their principal balances.
Beneficiaries of the waiver, according to the Cabinet, will be able to obtain title deeds for their land, and also regularise land accounts that have been in arrears for decades.
"The measure aligns with the government’s ongoing efforts to resolve historical land injustices, enhance agricultural productivity, and unlock land-based economic value," the dispatch read.
"Implementation will follow the Public Finance Management Act, with a 12-month moratorium provided to enable beneficiaries to clear their principal balances," it added.
