AFC seeks to raise US$10m

AFC Holdings, a State-owned financial services institution intends to raise US$10 million (ZWL$ equivalent) through agro-bills to finance the 2023/2024 summer cropping season.

The agro-bills will have a tenure of 270 days and 365 days with interest rate separately negotiated between the parties.

AFC in a public notice indicated that the agro-bills are open to individuals and institutional investors with a minimum investment of US$10 000 (ZWL$ equivalent).

“AFC Holdings Limited intends to issue US$10 million (ZWL$ equivalent) agro-bills to finance the 2023/2024 summer crop.

“AFC Holdings hereby invites corporates and individual investors to subscribe to these agro-bills,” reads part of the notice.

The agro-bills are guaranteed by the Government and have a prescribed asset status, liquid asset status, and tax exemption.

The summer cropping season started a few weeks ago following the rains that the country has received.

This follows the World Meteorological Organisation’s warning of EI Nino conditions that this could severely impact farm output in Zimbabwe and some regional countries.

The weather experts have predicted that Zimbabwe and some regional countries will likely experience a drought in the 2023/2024 summer farming season.

Funding of agriculture remains a challenge in the country as banks are reluctant to lend due to lack of collateral by the farmers.

Under the National Development Strategy 1 (NDS 1), which runs between 2021 and 2025, the Government has made it a priority to reform and restructure Agribank into a land bank to build confidence in the transferability and bankability of tenure systems and enhance the commercial value of the land.

The unbundling of Agribank resulted in the birth of AFC Holdings made up of four subsidiaries namely AFC Commercial Bank that offers tailored banking solutions; the AFC Land Bank of Zimbabwe, which is focused on transforming agriculture through the provision of affordable agriculture finance for all farming sectors; AFC Insurance, a flexible short-term insurance solutions provider and AFC Leasing that leases agricultural equipment from over 22 cluster centres countrywide.

The agriculture sector is one of Zimbabwe’s major economic centrepieces.

The sector remains the cornerstone of the economy, contributing about 10 percent of the gross domestic product (GDP) and providing livelihoods for about 70 percent of the population.

However, production and productivity remain vulnerable to weather-related shocks that impact on the performance of the economy at large.