Land bank avails loans to exporters
The Agricultural Finance Corporation (AFC)'s land bank (formerly Agribank) has lined up foreign currency-denominated loans for exporters to boost the country’s hard currency reserves following years of protracted trade deficits.
Twinned with this strategy, the bank will be scouting for regional opportunities to unlock shareholder value, according to chief executive Elfas Chimbera, who said offshore forays had kicked off with aggressive inroads in funding domestic cane producers.
Zimbabwe’s banks generally trade in the domestic currency and most transactions including loans are in the local unit.
But Chimbera said the bank was determined to help the country overturn its trade deficit by deploying forex throughout the agricultural value chain, which suffered extensive disruptions following the Covid-19 outbreak last year.
The country recorded a US$580 million trade deficit in 2020 after exporting US$4,4 billion worth of goods against US$5 billion in imports.
“The bank will continue to support exporters in agriculture as well as its value chain and hence contribute to foreign currency generation for the country,” Chimbera said in a statement to the bank’s financial results for the year ended December 31, 2020.
“The bank grew its sugarcane market share in the Lowveld and targets to expand its presence in the region. The bank also introduced loans in foreign currency mainly targeted at exporters in the agricultural value chain.
“The bank will continue to finance crops, that is tobacco, cotton, soya beans and horticulture. A number of farmers in horticulture covering macadamia, fruits, flowers and avocados, among others benefited from the bank’s financing in 2020,” he added.
The AFC bank overturned a ZWL$1,8 billion loss in 2019 to post an inflation-adjusted ZWL$239 million pre-tax profit during the period.
The recovery tracked growth in operating income, which closed at ZWL$1,994 billion during the period, from ZWL$1,396 billion previously.
Non-performing loans declined to 1,38% in historical terms during the review period from