ZB to raise $10m for agric financing

April 14, 2016 in Business

ZB Holdings is set to raise $10 million this year to finance agricultural activities, in a major boost for the sector that has been crying out for funding.

BY VICTORIA MTOMBA

This would be done through the flotation of agro bills, group CEO, Ronald Mutandagayi told NewsDay in written responses.

He said as at December 31, 2015, the group had $108,5 million in Treasury Bills on the balance sheet and has been participating as a player in the trading of the agro bills.

“The group, however, has floated agro bills for the financing of agricultural activities.

Cumulatively, a total of $31,2 million has so far been raised and disbursed since inception.

The group intends to raise another $10 million during the course of 2016,” Mutandagayi said.

The agricultural sector has been struggling to access funding from banks, as most of the land does not have title deeds. The 99-year leases have not been accepted by banks as collateral, after government failed to bring closure to the land reform exercise.

Farmers have resorted to contract farming or personal financing for agricultural activities, which is not sustainable. The tobacco sector has over 70% of its farmers, who are growing the golden leaf under contract and 25% are non-contract farmers.

The government has also delayed in paying farmers for grain deliveries to the Grain Marketing Board, constraining individual farmer’s capacity to finance their future cropping programmes.

Meanwhile, Mutandagayi said the group is in the process of engaging local councils, including Bulawayo, Victoria Falls and Plumtree, for the development of residential stands.

“We have already undertaken feasibility studies on a number of projects and will soon be engaging respective councils for mutually beneficial arrangements in the provision of affordable housing,” he said.

Mutandagayi said the group intends to raise project-backed finance this year for property development, with local and foreign partners.

The group has 10 units they have been selling in Twentydales and Hatfield and the group has 100 stands in Ruwa Springvale in Ruwa along the Harare-Mutare Road, and 150 stands in Beitbridge.

A number of institutions such as FBC Holdings, Old Mutual, MBCA Bank, Nicoz Diamond, CFI Holdings and Fidelity Life among others have been actively participating in the property sector.