Agribank to float agro bills in July

28 Jun, 2016 - 00:06 0 Views
Agribank  to float  agro bills  in July Agribank is planning to link farmers to corporate off takers who are currently importing to mitigate foreign exchange outflow

The Herald

Agribank is planning to link farmers to corporate off takers who are currently importing to mitigate foreign exchange outflow

Agribank is planning to link farmers to corporate off takers who are currently importing to mitigate foreign exchange outflow

Enacy Mapakame : Business Reporter

THE Agricultural Development Bank of Zimbabwe will float agro bills in July to raise $20 million to enhance agriculture financing. This comes as the bank is gearing itself to enhance funding support, especially for small holder farmers in livestock, community fresh produce markets, tobacco and sugar cane production.Agribank’s chief executive Mr Sam Malaba told shareholders at an annual general meeting in Harare yesterday that the bank seeks to further consolidate its position as the leading vehicle for agriculture financing and development in the country.

Mr Malaba said the bank supports the growing number of smallholder farmers with specific interventions that support the entire agriculture value chains. Last year, Agribank raised $20 million agro bills.

“The focus on the mandate for agriculture financing will therefore be sustained special priority accorded to smallholder farmers.

“The bank will explore avenues to link the farmers to corporate off takers who are currently importing, thereby mitigating in foreign exchange outflow,” said Mr Malaba.

Agribank, which was recently removed from the economic sanctions list of the United States, returned to the black after posting a profit of $1,68 million in the five months to May 2016 on business growth and cost containment measures.

As at May 2016, the Agribank’s tier 1 capital stood at $34,6 million after Government capitalised the bank to the tune of $30 million, 12 months earlier.

This resulted in the bank closing 2015 with a tier 1 capital of $31 million and a capital adequacy ratio of 29 percent compared to the regulatory ratio of 12 percent.

As at December 2015, Agribank had a liquidity ratio of 37 percent compared to the Reserve Bank of Zimbabwe’s requirement of 30 percent.

Agribank embarked on a staff rationalisation programme which resulted in the disengagement of 20 percent or its 1 123 staff while two “marginal” branches were

also closed. As a result, Mr Malaba said, the bank will generate annual savings of $2,2 million.

Agribank has a non performing loan (NPL) ratio of 13,9 percent after it transferred $17 million of its bad loans to the RBZ’s special purpose vehicle for debt take over, the Zimbabwe Asset Management Company.

In the outlook period, Mr Malaba said the bank will seek further interventions from Government to improve its capitalisation to $100 million by 2018.

“It is imperative for the bank to have a strong balance sheet so that it can raise lines of credit from regional and international financial institutions as well as medium to long term funding for agriculture,” said Mr Malaba.

Share This:

Sponsored Links