More than two-thirds of the 100 000 farmers who produced US$685 million tobacco’s worth in 2014 were smallholder growers

CBZ Holdings Ltd (CBZH) has secured US$19 million from offshore funders for on-lending to small-scale tobacco farmers, an official has said.

More than two-thirds of the 100 000 farmers who produced US$685 million tobacco’s worth in 2014 were smallholder growers.

Tobacco is Zimbabwe’s number one agriculture export.

CBZH marketing and corporate affairs executive Mrs Laura Gwatiringa said regardless of rising bad debts, largely induced by poor harvests, agriculture funding remained a priority for the group.

In the 2014/15 farming season, CBZH advanced US$337 million towards horticulture, wheat, maize, piggery, poultry, soya, cotton, dairy, beef and crocodile farming.

A further US$58,5 million, 34 percent below the targeted US$105 million, has already been generated from the sale of short-term debt to help the struggling national silo, the Grain Marketing Board (GMB), pay for grain.

“The bank is active in the drive to capacitate GMB in providing a reliable market for grain farmers. This is being done through the raising of funds via Agriculture Marketing Authority bills,” said Mrs Gwatiringa.

In the year to December 2014, CBZH reported non-performing loans rose to 7,4 percent from 6,1 percent.

Many small-scale farmers fail to repay loans when their crops perform badly due to adverse weather, said Mrs Gwatiringa.

“The bank has also embarked on a farmer training programme that focuses on both financial and business management skills,” she said.

Agriculture in Zimbabwe oils economic development by providing jobs, food security and raw materials for manufacturing.

A 2012 report by the Zimbabwe Statistical Agency (Zimstat) estimates that as many as 71,8 percent of Zimbabweans are employed in the agricultural sector. In rural areas, this figure is as high as 92 percent.

In 2012, agriculture contributed 9,1 percent to total exports and 18 percent to GDP. In 2013, agriculture contributed 17 percent to GDP.

Meanwhile, CBZH reported that profit after tax for the year to December 31, 2014 fell 10 percent to US$33 million from US$36,7 million in the prior year on higher borrowing costs.

Basic earnings per share dropped to US5,6c from US6,3c, as interest expense spiked 24 percent to US$101 million.

The banking group will pay a final dividend of US$1,4 million, or USc 20 a share.

In the review period, net interest income came in at US$88,3 million and total deposits grew 6,3 percent to US$1,4 billion.

CBZH reported the balance sheet rose to US$1,6 billion from US$1,5 billion a year earlier.

Analysts have guided the group’s full-year 2015 net income to rise 4 percent on reduced costs, according to brokerage firm IH Securities.

“We believe the bank is unduly discounted to peers,” said the stockbrokers.

Shares of CBZH closed at USc10 in Wednesday’s trading.