Home » General » ZIMBABWE GOVT TO PRIORITISE CAPITALIZATION OF AGRICULTURAL BANK

HARARE, July 30 (NNN-NEW ZIANA) — The capitalization of the Agricultural Bank of Zimbabwe (Agribank) is a top priority of the government as its function is to help capacitate farmers to increase production and ensure food security for the country, says the Deputy Minister of Agriculture, Mechanization and Irrigation Development responsible for livestock, Paddy Zhanda.

Speaking during a question and answer session of the National Assembly here last week, Zhanda said the issue of capitalization of Agribank was a top priority of the government which wanted the financial institution to deliver on its mandate of assisting farmers.

“One of the issues that the government is also looking at is the issue of capitalization for Agribank,” he said.
“I am sure the Minister of Finance and Economic Development will concur with me that it is very high on the agenda on how to capitalize Agribank in order for farmers to access borrowing from the bank.”

He said Zimbabwe’s land reform programme came with certain restrictions and policies on funding and that was where the bank for farmers came in to provide them financial assistance.

“When people applied for land, one of the conditions of the application, especially A2 farmers, was that they must attach and exhibit the financial resources to carry all the activities on the farm and most of them did that to prove that they had the financial muscle and resources to carry out activities at the farm when they are allocated land,” he said.

“Except in AI and A2 farms where it is recognized that those farmers will continue to want government support, hence the Presidential Input Scheme which has always been availed every year. Government expects A2 farmers to borrow from their banks,” he added.

Agribank, which was recently removed from the United States sanctions list, has struggled to deliver its mandate of lending to farmers due to liquidity constraints in the economy. Market watchers contend that Agribank needs an investor to inject fresh capital as it seeks to regain lost ground after posting a 3, 7 million
US dollar loss during the first half of 2013.

The bank had a capital of 20.43 million US dollars against the minimum regulatory requirement of 25 million USD at the end of December 2012.

The government last year approved the disposal of 49 per cent of its stake in the bank to strategic investors as a way of recapitalizing the financial institution.

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