The Sunday Mail
Business Reporter
ZB Financial Holdings plans to float U$15 million agro bills to finance farmers in the 2016/2017 summer season.
Encouraged by the success of last year’s US$10 million agro bills, which were fully subscribed and repaid, ZB’s new paper will have a relatively longer tenor.
Experts are optimistic that Government’s Command Agriculture scheme and the forecast normal-to-above-normal rains will help lift the agricultural sector.
ZB group head of corporate services Mr Shadowsight Chiganze told The Sunday Mail Business that the funds would be for both existing and new clients.
“ZB Financial Holdings’ support to the agricultural sector in the 2016/17 season is projected to be around US$15million. The scheme targets both corporate and small-scale farmers who will benefit from this funding through various means.
“Some will access funding directly depending on viability of their proposals while others will benefit through the value chain.
“Support to seed houses and merchants of various products will result in significant downstream benefits to several small scale farmers and agro-dealers. In the same vein, financing of irrigation development will have a far reaching impact in terms of employment and markets, particularly in the horticulture sector,” said Mr Chiganze.
He said last year’s US$10 million tranche had matured and obligations to investors had been fully settled from farmers’ repayments.
“Funding to farmers will depend on viability of the projects and market demand. However, the bank takes into account concentration risk and always tries to manage this risk by supporting different enterprise and as many farmers as possible in all sectors of agriculture.
“The interest rates charged largely depend on the cost of funds. The cost of agro-bill funds to be raised in the market will influence the interest rates to be charged in 2016/17,” Mr Chiganze added.
ZB’s interest rates range from single-digit to the prescribed maximum of 15 percent depending on viability and a client’s risk rating.
In the six months to June 30, 2016, ZB Financial Holdings reported a 46 percent increase in net income to US$5,9 million driven by cost savings and a strong performance across all business lines.
Deposits in the review period slowed to US$255 million, down from US$266 million last year.
ZB’s loan book fell to US$94 million from US$100 million after the group cut back on lending owing to rising defaults.
