Harare – State agriculture development bank, Agribank says it is expanding support to the agriculture sector, and is likely to surpass its initial set target of $105 million and achieve $125 million agriculture financing, inclusive of both on and off balance sheet financing.
According to the Bank, to date, total lending to agriculture amounted to $80 million.
Chief executive Sam Malaba said last week financing is being extended to major subsectors of the agriculture sector such as tobacco, maize, soya, horticulture as well as the critical fertilizers and chemical industries that support agriculture with inputs.
He said the Reserve Bank of Zimbabwe (RBZ) set up a $28 million facility for lending to small scale tobacco farmers through Agribank and Tobacco Industry and Marketing Board (TIMB).
Malaba said the Bank successfully concluded a number of deals with tobacco merchants for the financing of their out-grower schemes a move which has also helped in foreign currency generation.
“The facility targeted 18 000 smallholder farmers who were to be capacitated with inputs, seeds and fertilizers, motorbikes and technical services.
“The RBZ is setting up a new $85.3 million enhanced facility for lending to small scale farmers. The RBZ is offering the facility to TIMB through Agribank to finance procurement of inputs and working capital requirements to increase tobacco production.
“Of this facility about $66.2 million is towards procurement of inputs for the production of tobacco covering an area of 51 000ha, of which the inputs worth $15.3 million covering 11 000ha has already been purchased and are now being distributed. The remainder of the inputs are yet to be secured and would cover 40 000ha benefiting the small scale tobacco farmers,” he said.
Malaba also said the balance of $19.1 million to fund the development and enhancement of tobacco infrastructure (curing and irrigation) by eligible small scale tobacco farmers.
He said in a bid to raise foreign currency the Bank managed to also support key sectors in agriculture like floriculture and horticulture.
Additionally, Malaba said over the past five years, the Bank raised through Agro bills, a cumulative $65 million in support of agriculture sector.
“The Bank together with FBC bank is raising $40 million Agro bills for the 2018/19 summer cropping season as well as cash crops. We are confident that the bills will be fully subscribed to by the market.
“The Bank will also enhance its support in Command Agriculture by providing working capital for farming schemes and groups,” he said adding that the strategy will continue in the future as the Bank continues to support agricultural activity.
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