Zanaco, AGCO in Massey Ferguson asset finance deal
Zambia’s leading Commercial Bank, Zanaco (LuSE-ZANACO) signed an asset finance deal with AGCO (NYSE: AGCO), a global manufacturer and distributor of agricultural equipment, to partner with Zambian farmers in the purchase of farm equipment. In a media statement emailed to the Zambian Business Times - ZBT, AGCO stated that the deal was unveiled during the Agritech Expo in Chisamba in April 2018. The new partnership between AGCO, its national distributor BHBW Zambia Limited and the Zambia National Commercial Bank Plc entailed the provision of retail financial solutions for farmers purchasing machinery from AGCO’s Massey Ferguson brand. “Access to credit is a crucial requirement for farmers seeking to acquire the right equipment to expand and advance their businesses,” says Nuradin Osman, AGCO Vice President and General Manager Africa. “This partnership has been set up to address the specific needs of the agricultural industry which is often perceived as too high a risk for financial service providers due to its seasonal nature, irregular income streams and exposure to external factors such as the weather, pests and commodity price fluctuations.” “AGCO understands the pressure that Zambian farmers are facing – from small-scale farmers through to commercial enterprises and large agri-projects. Together with our partners BHBW Zambia and Zanaco, we have developed a finance solution aimed at the full spectrum of farming operations which offers affordable and low-rate financing in the form of financial leases and agro loans. “We are delighted to be working with BHBW Zambia and Zanaco on this retail finance initiative,” added Mr. Osman. “They have enormous experience in the farm machinery and agriculture sectors and we look forward to a successful partnership serving Zambian farmers.” Commenting, Hennie Heyneke, Managing Director, BHBW Zambia said: “Access to retail finance is an important benefit for our customers’ business growth, enabling them to realize their farm machinery purchases, invest in the latest equipment and manage cash flow in line with seasonal demands.” Mechanization of agriculture in Zambia is expected to lead to increased productivity and lower the cost of production. Zanaco’s parent company and equity holder Rabo Bank has extensive agro finance expertise which if fully rolled out into Zambia, can provide alternative private sector led support to the diversification efforts in agriculture.