Harare – Zimbabwe’s largest bank by assets and deposits, CBZ Bank issued two bond instruments with a 270-day tenure on Monday 06 January in a bid to finance the procurement of maize and soybean farming under the Commercial Contract Farming programme.
A corporate bond is a debt security issued by a corporation in order to raise financing for a variety of reasons. They usually offer higher yields than government bonds.
The launch of the two bond issues comes at a time when the country is faced with a sustained vile drought that could aggravate the already dreadful economic situation.
Southern Africa is faced with a second successive poor harvest due to erratic rainfalls and according to the United Nations, about 8.5 million Zimbabweans are food insecure.
The first issue worth US$50 000 000, according to CBZ seeks to raise money to import farming chemicals and fertilisers that are not available locally.
Applications for CBZ Bank series 1 are for a minimum of US$50 000 and in multiples of US$10 000 thereafter at an interest rate of 9.5% per annum.
The other issue which is worth ZWL$500 000 000 at an interest rate of between 15-18% per annum is to enable the purchasing of seeds, fertiliser and chemicals for maize and soybean production
Applications for series 2 are for a minimum of ZWL$1 000 000 and in multiples of ZWL$500 000 thereafter.
Both offers open on January 06, 2020 and close on January 10, 2020.
The Commercial Contract Farming programme is being spearheaded through CBZ Agro Yield which is a financing initiative created in partnership with government to sponsor maize and soybean farming for the 2019/2020 season. The initiative is to curb the growing import bill with regards to agricultural produce.
Given the inflationary environment in the country, the question remains, will farmers be able to clear the debt.
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