HomeBusinessAgribank, FBC to raise $20m for agric

Agribank, FBC to raise $20m for agric

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STATE-OWNED agro-lender, Agribank and FBC are going into the market to raise $20 million for the 2017/18 agricultural cropping season.

BY TARISAI MANDIZHA

This development follows the permission by government last month for the two banks to float agro-bills aimed at raising funds for on-lending to farmers.

A cumulative total of $65 million has been raised for agriculture by the two banks as part of an ongoing business partnership since 2010.

In a statement, Agribank said the funding has been deployed to support diverse agricultural activities, such as sugarcane, agro processors, tobacco smallholder farming, macadamia farming, dairy farming, seed maize, maize (Brazil more food programme), wheat, and soya.

“Through the Agro bills funding, Agribank has been able to support a diverse range of farming activities across the country for both cash crops and grains production. In the Lowveld, Agribank is now the leading financier of smallholder sugarcane farmers and recently received an award, as recognition of the fact that Agribank is now the largest financier supporting sugarcane smallholder farmers,” Agribank said.

The bank said it has collaborated with the Tobacco Industry and Marketing Board and the Tobacco Research Board to support the tobacco sub sector.

Previously, FBC and Agribank have received support from investors, including but not limited to pension and provident funds, insurance companies, life mutual, commercial banks and other institutions, as well as the investing public.

The Agro Bills, which are being raised through Agribank and FBC have a tenure of 270 to 360 days and enjoys prescribed asset status, liquid asset status, government guarantee and tax exemption.

Agribank said the funding was seasonal, but the two institutions were exploring opportunities to secure medium and long-term funding, which is more suitable for capital and infrastructure development to augment existing seasonal financing.

“Agribank and FBC have always been able to pay investors on maturity of the agro bills using proceeds from the various agricultural interventions,” it said.

“Agribank will continue to expand support towards agriculture, with special focus on food security and foreign currency generation. The interventions have helped farmers increase production and productivity leading to growth in household incomes and thereby also contributing to poverty reduction.”

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