FBC, Agribank disburse US$20m to farmers

FBC Bank and the Agricultural Development Bank of Zimbabwe (Agribank) have started disbursing the US$20 million raised through floating agro-bills in preparation of the 2016/2017 summer cropping season.

The funds were raised through subscriptions from pension and provident funds, insurance companies, commercial banks and individuals.

The agro- bills have a tenor of between 270 days and 360 days whilst the interest rates on private placement are negotiable.

Farmers began applying for the facilities in August this year.

FBC spokesperson Ms Priscilla Sadomba told The Sunday Mail Business that the two banks will make the funds available to small-scale farmers on time.

“The funds (US$20 million) raised will go a long way in financing smallholder farmers involved in livestock, maize, fresh produce, tobacco and sugar cane production to give them a head start.

“The primary purpose of this funding structure is to ensure sustainability of farming activities with a view to boosting food security in the country and improve quality of life of smallholder farmers.

“Smallholder farmers are often faced with serious challenges of working capital to finance their farming activities hence the steps taken by FBC and Agribank to plug the gap,” said Ms Sadomba.

FBC Bank and Agribank have successfully floated agro-bills for the past five years.In the 2015/2016 farming season, the two banks raised US$15 million to support targeted agricultural activities.

The successful uptake and repayment of the facilities by farmers has underpinned the success of the programme.

The appeal of the bills has also been made possible by the ability of the two banks to settle the bills on maturity, establish a sinking fund from agricultural sales proceeds on a stop-order

basis and the prescribed asset status of the bills.

Apart from being exempt from tax, the agro-bills also have a Government guarantee.

“It is important to note that all the investors who purchased the bills for the 2015/2016 season have been fully settled.

“Buoyed by the success of the past season, FBC and Agribank have increased the 2016/17 agricultural season financing to US$20 million,” added Ms Sadomba.

The banks have also assured investors that they will be able to pay the 2016/2017 bills on maturity.