Banks to con­tinue fund­ing agric sec­tor

Chronicle (Zimbabwe) - - Business - Enacy Ma­pakame Harare Bureau

BANKS have com­mit­ted to con­tinue pro­vid­ing fund­ing to­wards agri­cul­ture sec­tor while dis­cus­sions over the use of 99-year leases as col­lat­eral con­tinue.

The 99-year leases have been a bone of con­tention be­tween farm­ers and banks, with the lat­ter hold­ing back on ad­vanc­ing loans in the ab­sence of bank­able col­lat­eral. Re­sul­tantly, newly re­set­tled farm­ers have strug­gled to ac­cess ad­e­quate fund­ing

CBZ Hold­ings head of agribusi­ness Cor­diad Munemo told del­e­gates at a Zim­babwe Na­tional Cham­ber of Com­merce breakfast meet­ing yes­ter­day that the nec­es­sary

LON­DON — Oil fell be­low $49 a bar­rel yes­ter­day, giv­ing up part of Au­gust’s strong rally, as signs of ris­ing sup­ply out­weighed hopes that pro­duc­ing na­tions will agree steps to sup­port prices.

A Nige­rian mil­i­tant group, which has claimed a wave of stake­hold­ers were still ne­go­ti­at­ing over the bank­a­bil­ity of the 99-year leases.

He said banks would pro­vide fund­ing for vi­able projects, al­beit the un­avail­abil­ity of col­lat­eral.

Agrib­ank of­fi­cial Mr Di­vine Ng­wenya said while ne­go­ti­a­tions on the bank­a­bil­ity of the 99-year leases were still pro­gress­ing, the bank would con­tinue fi­nanc­ing the sec­tor.

“As for the 99-year leases, it is still work in progress with bankers and farm­ers. But banks can only fi­nance vi­able projects and col­lat­eral is nec­es­sary in case we do not get the money back.

“This is de­pos­i­tors’ money and there­fore should be avail­able when de­pos­i­tors ask for it.

“Banks are there to pro­mote de­vel­op­ment and want more busi­ness in agri­cul­ture,” said Mr Munemo.

CBZH, which is the big­gest lender in Zim­babwe with a loan book size of over $1 bil­lion ex­tended 32 per­cent of its loans to agri­cul­ture in the half year to June 30, 2016.

The bank, how­ever, booked a 3,8 per­cent in­crease in bad loans due to the poor per­for­mance in the sec­tor. Other fi­nan­cial in­sti­tu­tions ZBFH, Bar­clays, MBCA, and Agrib­ank chan­nelled 14 per­cent, 9 per­cent, 19 per­cent and 34 per­cent re­spec­tively of their lend­ing to agri­cul­ture in the first half of the year.

The agri­cul­ture sec­tor has ac­counted for 22 per­cent of the five banks’ to­tal loans given out in the first half of the year.

Mr Ng­wenya said Agrib­ank was work­ing to­wards se­cur­ing lines of credit from in­ter­na­tional fun­ders to in­crease agri­cul­ture lend­ing. The bank, which was re­moved from the OFAC sanc­tions list re­cently, has been strug­gling to raise ad­e­quate funds to fi­nance agri­cul­ture.

It recorded $2 mil­lion profit for the half year to June 30, 2016, its first ever profit since dol­lar­i­sa­tion.

“The bank has been un­der sanc­tions and be­cause of that, could not mo­bilise lines of credit to fully fi­nance agri­cul­ture.

“Prior to sanc­tions, the bank got fund­ing from in­ter­na­tional fun­ders,” he said.

The bankers, how­ever, ac­knowl­edged in­ter­est rates at 15 per­cent for the pro­duc­tive sec­tors were still high for a dol­larised econ­omy.

re­vive ef­forts to tackle ex­cess sup­ply, Saudi Ara­bia’s En­ergy Min­is­ter Khalid al-Falih said on Au­gust 11 OPEC and non-mem­bers will dis­cuss the mar­ket next month in­clud­ing any ac­tion that may be needed.

The In­ter­na­tional En­ergy Fo­rum, which groups pro­duc­ers and con­sumers, is due to meet on Septem­ber 26-28 in Al­giers.

A pre­vi­ous at­tempt by pro­duc­ers to freeze out­put col­lapsed in April on ten­sions be­tween Iran and Saudi Ara­bia and the re­fusal of some coun­tries to join.

An­a­lysts re­main skep­ti­cal con­crete ac­tion will re­sult this time. — Reuters.

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