Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Agribank to disburse US$30 million from IDC

Agribank to disburse US$30 million from IDC

November 23, 2012 in Business

THE Agricultural Bank of Zimbabwe (Agribank) will next month start 
disbursing the US$30 million loan facility it secured from the Industrial 
Development Corporation of South Africa (IDCSA), director of marketing and 
business development Joseph Mverecha said.

Report by Gamma Mudarikiri

Mverecha told businessdigest this week the bank had already received 
approvals from IDC and from Export and Import Credit Insurance for the line 
of credit.

The loan, would target companies in the agro-industry such as those in seed 
and fertiliser production, horticulture, cotton and dairy.
Agriculture is among many sectors of the economy currently struggling due to 
financial constraints.

Agribank received a similar facility last year which was disbursed to 
several productive sectors. About a third of the funds were disbursed to 
agriculture and this is expected to be the same case this year with the 
US$30 million loan.

On the progress made on the privatisation of the bank, Mverecha said the 
State Procurement Board had approved the appointment of a financial 
adviser to the process and evaluation was expected to start by the first 
quarter of next year.

The bank, which is to be privatised according to cabinet approval of May 
2011, intends to maintain its bias towards the agricultural sector. The 
privatisation exercise will see government, the sole shareholder, retaining 
51% shareholding after disposing of the remaining stake to a strategic 

The bank announced that privatisation was part of its plans to raise 
capital to comply with the US$100 million minimum capital requirements 
stipulated by the Reserve Bank of Zimbabwe this year.
Banks must comply by having minimum capital of US$25 million by end of 
December this year and US$100 million by end of 2014. Agribank as of August 
this year was capitalised at US$13,7 million.

In the half year ended June 30 2012, the bank recorded a loss after tax of 
US$2,4 million, which it attributed to increased operating expenses. 
Agribank last year invested US$2,7 million in ICT upgrade and branch 
connectivity, which increased operating costs and resulted in the loss.

Mverecha said the bank had put in motion a process for comprehensive review 
of all operating costs and was implementing a cost containment programme 
that would yield visible gains to the bottom line in December this year.


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