The Sunday News
Wilson Dakwa, Business Reporter
THE People’s Own Savings Bank (POSB) says it is impressed by the high number of farmers enquiring and accessing financial support through its agri-business loan facility.
POSB head of marketing Mr Lawrence Kupika said the loan facility had received overwhelming uptake mostly from tobacco farmers.
“Many farming businesses and individual farmers have benefited from the scheme. Tobacco farmers have largely benefited due to the availability of a fairly water-tight stop order system enabling deduction at source,” said Mr Kupika.
He, however, said most applicants failed to qualify under the scheme due to lack of historical evidence as well as collateral to secure the facility.
“As a bank we are eagerly anticipating the use of the Collateral Registry currently awaiting adoption. The repayment terms depend on the farmer or agribusiness’ needs as well as their ability to pay back facilities granted, they are not cast in stone. The bank is, however, flexible in this regard,” said Mr Kupika.
The financial institution’s agri-business loan facility falls under its Small to Medium Enterprises (SMEs) and Agribusiness Unit, which is a functional unit within the corporate and investment banking division of the Bank.
“We urge people to utilise Government ministries, societies, clubs and associations to enhance their knowledge if they are in farming. It is a very broad based industry and one has to fully understand the whole process for them to be viable and to make a difference in their respective areas of expertise.
Applications for the 2017/18 season are welcome. The Agribusiness department comprises a committed team ready to serve this all-important sector,” said Mr Kupika.
He said the bank introduced the agri-business loan facility as part of its thrust to contribute to economic development and sustainability in communities in-line with the Government’s efforts to achieve targets set under the Zim Asset as well as coming up with tailor-made financial products for agribusinesses.
“The facility arose as a result of the uniqueness of agriculture which cannot be funded from the same products as other sectors of the economy due to its unique cash flows which are determined by crop cycles. Conventional term loans for example require monthly instalments which a farmer cannot make if he or she is producing tobacco for example which essentially has a 12 month production cycle.
“The facility is generally not class defined, it is for any business engaging in any farming activities which can include traditional crop farming, animal husbandry, agricultural inputs, value chain financing, irrigation schemes and co-operatives. We encourage farmers to regard their farming enterprises as businesses and as such have records of revenue, yields, and contracts so as to be eligible for the loan facility,” Mr Kupika said.
@WilsonDakwa1
