Agribank chief executive Sam Malaba (left) stresses a point during a press conference yesterday while finance director Mr Elfas Chimbera pays attention.
AGRIBANK has lined up agriculture and export facilities totalling $98 million and about $20 million has so far been snapped up as the bank steps up efforts to play its key mandate of financing agriculture to boost productivity.
This comes as Government recently directed Agribank to focus on its core role of financing agriculture.
Agribank chief executive officer Mr Sam Malaba told journalists in Harare yesterday during the presentation of the bank’s results for the half year ended June 30, 2017 that despite the harsh operating environment characterised by “limited quality borrowing clients”, the bank will continue to lend to agriculture.
The bank has partnerships with major tobacco industry players like the Tobacco Industry and Marketing Board (TIMB) and the Tobacco Research Board (TRB) for the development of the tobacco industry.
Tobacco has been deliberately targeted because it is the biggest foreign currency earner in the country, followed by gold.
“The bank has increased its funding facility with TIMB to finance the construction of ‘rocket barns’ and drip irrigation for small holder tobacco farmers.
“The RBZ has availed a $28 million TIMB facility through Agribank designed to support production and productivity growth in the tobacco subsector,” said Mr Malaba.
Under the $28 million tobacco facility, smallholder farmers are expected to benefit from TIMB which will provide inputs while Agribank provides working capital.
The idea is to capacitate small-scale tobacco growers, increase production capacity and generate the badly needed foreign currency.
Other facilities organised by the RBZ, which are being handled by Agribank earmarked for agriculture, include the $10 million horticulture facility, $50 million export facility and $10 million value addition.
Mr Malaba said $3,3 million has so far been approved under the horticulture facility while $8,9 million and $7,7 million, have also been approved under the export and value addition facilities.
Meanwhile, during the period under review, Agribank’s profit after tax marginally increased to $2,18 million from the $2,16 million achieved during the comparative period year.
The profit came on the back of Government’s recapitalisation programme of the instituted in 2015 and 2016, together with growth in business driven by ICT delivery channels.
Net interest income for the period under review was $13 million, representing a 14,2 percent growth on prior year despite a significant decline in the loan book due to the transfer of non-performing loans to the Zimbabwe Asset Management Company (Zamco).
Overall, Agribank has transferred $38 million to Zamco, a special purpose vehicle created by the RBZ to hive off NPLs from banks so as to clean their balance sheets.
Loans and advances fell by 19 percent to $80,28 million during the period under review as a result of the transfer of loans to Zamco, which outweighed growth in new loans.