HARARE – FBC Bank and the Agricultural Development Bank of Zimbabwe (Agribank) are in the process of mobilising $20 million worth of agro-bills for the 2018/2019 summer cropping season.
A significant portion of the facility will be loaned to smallholder farmers to boost their productivity levels.
The funds are being raised through subscriptions from pension and provident funds, insurance companies, commercial banks and individuals.
The agro-bills have a tenor of between 270 days and 360 days, while the interest rates on private placement are negotiable. And farmers will commence applying for the facilities in August this year.
Agribank CEO Sam Malaba recently told BH24 that the two banks have made the funds available to small-scale farmers.
“As Agribank and FBC we are raising agro-bills of $20 million as we always do. We are happy to note that majority of that money will be for small-scale farmers.
“This amount will go a long way in financing small-holder farmers involved in livestock, maize, fresh produce, tobacco and sugar cane production.
“The primary purpose of this funding structure is to ensure sustainability of farming activities with a view to boosting food security in the country and improve quality of life of smallholder farmers.
“Smallholder farmers are often faced with serious challenges of working capital to finance their farming activities hence the steps taken by FBC and Agribank to plug the gap,” said Mr Malaba.
FBC Bank and Agribank have successfully floated several agro-bills over the past five years.
In the past two farming seasons, the two banks have raised $20 million yearly to support targeted agricultural activities.
The successful uptake and repayment of the facilities by farmers has underpinned the success of the programme.
The appeal of the bills has also been made possible by the ability of the two banks to settle the bills on maturity, establish a sinking fund from agricultural sales proceeds on a stop-order basis and the prescribed asset status of the bills.
Apart from being exempt from tax, the agro-bills also have a Government guarantee.
FBC spokesperson Priscilla Sadomba said:
“It is important to note that all the investors who purchased the bills for the 2016/2017 season have been fully settled.
“Buoyed by the success of the past season, FBC and Agribank have continued to finance farmers.”
The banks have also assured investors that they will be able to pay the 2018/2019 bills on maturity.