The Kenya Tea Development Agency on Tuesday rejected allegations that its factories mismanaged more than Sh26 billion ($200 million) in loans, saying all short-term commodity loans cited by regulators have been fully repaid and longer-term borrowings are being handled properly.
The denial follows an audit by the Tea Board of Kenya that accused KTDA-managed factories of taking out improperly approved loans totaling Sh26.06 billion as of June 2025. The report, presented to parliamentary committees last week, criticized the agency for centralizing loan approvals at headquarters and inflating asset values to secure credit.
KTDA, which operates 71 tea factories and represents more than 600,000 smallholder farmers, said it has not yet received an official copy of the audit but is ready to address any concerns.
“All commodity loans highlighted in the preliminary findings were short-term bridging finance and have been fully retired as of September 2025,” the agency said in a statement. It described a Sh12.8 billion commodity loan as temporary funding needed after 104 million kilograms of tea went unsold because of a now-lifted direct-sales ban, new minimum reserve prices and market disruptions in Pakistan and Egypt.
The remaining Sh13.26 billion consists mainly of long-term inter-factory loans and asset financing, which KTDA said are under structured repayment plans and comply with internal policy.
Tea sector faces growing pressure
The audit is part of a wider government review ordered in October amid farmer anger over record-low bonus payments for the 2024-2025 season. Some factories west of the Rift Valley paid as little as 18 shillings ($0.14) per kilogram of processed tea, compared with auction prices that reached 80 shillings in better-performing regions.
Lawmakers have called the payout disparities discriminatory and threatened lifestyle audits of KTDA directors. The National Assembly’s agriculture committee is conducting its own investigation.
KTDA Chairman Chege Kirundi told reporters Tuesday that the agency remains committed to financial discipline and higher farmer returns.
“We are open to dialogue and ready to clarify any outstanding issues,” Kirundi said outside the agency’s headquarters on Koinange Street.
The controversy comes as Kenya, the world’s leading exporter of black tea, grapples with unsold stocks, certification costs and volatile global prices. Tea exports earned the country Sh185 billion last year.
In response to the audit, KTDA said it froze new inter-factory lending last month and is cooperating with calls for physical verification of factory assets.
Farmers and some lawmakers remain skeptical, demanding deeper reforms including stricter enforcement of a 2023 agreement limiting management fees and director perks.
For now, the agency insists the loans were necessary and lawful. Regulators and parliament say they will keep digging.
