Agribank would take part in the Reserve Bank of Zimbabwe funding programmes such as the US$20 million horticulture facility.

AGRICULTURAL lender, Agricultural Bank of Zimbabwe Limited (Agribank), said last week it was planning to invest significantly into smallholder farmers in the coming year as part of efforts to boost exports and curtail imports.
Slackening exports and rising imports are some of the factors that have been blamed for the liquidity crisis affecting the economy.
Large amounts of foreign currency have been deployed to import goods, leading to the depletion of United States dollars in the country.
The State-controlled bank, which last week reported a profit after tax of US$4,8 million for the full-year ended December 31, 2016, said it would focus on executing the mandate that it was established to perform.
During the prior comparative period, the bank had posted a US$6,3 million loss.
Agribank said it was consolidating its position after posting a profit for the first time since dollarisation in 2009.
During the review period, the bank had robust growth in net interest income and a drop in costs after a cost containment programme.
The bank said operating costs declined to US$22,3 million during the review period, from US$26 million the previous year.
At a media briefing to announce the results, chief executive officer, Sam Malaba, said support to smallholder farmers would produce several benefits for the country, including food security.
He said the bank would be targeting smallholder sugar cane and tobacco farmers under the programme.
He said deployment of resources would take serious consideration of the ability of recipients to repay loans.
“The bank will continue to work closely with smallholder cane producers in Chiredzi and Triangle,” Malaba said.
“The bank is now one of the biggest financiers of the smallholder sugarcane farmers in the Lowveld. Targeting smallholder farmers will ensure that they are funded. In the medium and long term, this will lead to increased industry capacity utilisation, reduce imports and increase exports,” he added.
Agribank will also target financing farmers in smallholder irrigation schemes, smallholder soya bean and potato farmers and banana and beans farmers among others.
He said Agribank would take part in the Reserve Bank of Zimbabwe funding programmes such as the US$20 million horticulture facility announced in February, as well as the US$10 million value chain facility also announced at the beginning of the year.
“We will focus on the value chain, especially smallholder sugar cane farmers because they do not side market their produce. Once they deliver, we are paid,” added Malaba, responding to questions about smallholder famers’ ability to service loans.
“The bank will also work on backward linkages to finance growers and link them to the fresh produce farmers market. The bank has budgeted US$1,5 million for this market in 2017,” said Malaba.
Net interest income rose by 45 percent to US$25,9 million during the review period, from US$17,8 million during the prior comparable period.
Non-interest income remained flat at US$5,3 million.
Operating costs dipped by 14,5 percent to US$22,3 million, from US$26 million during the prior year following a staff rationalisation exercise.
The bank’s total assets grew by 18,8 percent to US$204 million during the review period, from US$171,7 million the previous year.
Malaba said the bank would increase collections to improve its non-performing loans (NPL) ratio, which stood at 20 percent as at December 2016.
The bank is targeting to have NPLs lowered to a single digit by year end.
At year end, the bank’s capital stood at US$51,1 million after a US$10 million injection by government last year.

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