Home » Business » BancABC Secures U.S.$25 Million Loan

REGIONAL bank, BancABC has secured $25 million from Germany-backed African and Trade Investment Fund for on lending to farmers in five countries, including Zimbabwe.

In a statement, BancABC chief operating officer Mr Francis Dzanya said Fund will provide money to be loaned to farmers in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe.

“The mission of the AATIF is to help Africans maximise the potential of the continent’s agricultural production, manufacturing, service provision and trade activities for the benefit of the poor,” said Mr Dzanya.

“By making loan capital available the fund aims to help stimulate agricultural output, production levels and add value across the entire chain of agricultural activities. Knowledge and skills transfer is a major focus that is promoted through AATIF support for contract farming operations”.

It was not immediately clear when the money will be available in the country. The Fund’s chairman Mr Thomas Duve added the their risk sharing would allow BancABC to increasingly step into transactions along the entire agricultural value chain ideally with longer term funding and fair collateral policies.

“The 45 percent AATIF paripassu risk participation initially covers an incremental agricultural lending portfolio of up to $11 million, with the remainder being extended as senior loan.

“This risk participation limit may be raised going forward, subject to a successful roll out of the programme,” he said.

BancABC will manage the entire credit assessment and lending relationship with beneficiaries, while sharing the risk equally with the Fund, Mr Dzanya said adding the agreement between the two institutions was natural and offered benefits for both parties.

“BancABC operates in key markets in sub-Saharan Africa and has the network and experience required to ensure that funding is effectively and efficiently channelled through to the agriculture sector,” said Mr Dzanya.

“We have enjoyed exponential growth across our retail and other operations and, as a bank born in Africa for Africans, have the capabilities to assist AATIF in achieving their objectives.

“We are proud to be acting as an intermediary for the organisation and being able to play a part in creating a vibrant, competitive agriculture sector on our continent.”

The Africa Agriculture and Trade Investment Fund is an innovative public-private partnership founded in August 2011 and dedicated to uplift Africa’s agricultural potential for the benefit of the poor.

Source : The Herald