Zimbabwe: NMB Bank to raise $ 2 billion for farmers

Senior Business Journalist

NMB Bank Limited has announced that it will raise up to $ 2 billion through a private placement of a 12-month Agro Bill for subsequent loans to farmers for the 2021/22 farming season.

Agriculture is the backbone of Zimbabwe’s economy, which supports the economic, social and political life of the majority of Zimbabwe’s people.

The government aims to achieve an agricultural economy of $ 48.2 billion by 2025 based on the Agriculture and Food Systems Transformation Strategy, which aims to achieve the target growth by 2025.

Through various agricultural support programs, the government has committed billions of dollars to the sector, while private sector funding has also proved useful.

In a circular, NMB said the $ 2 billion Agro Bill would support new and existing commercial farmers on its loan portfolio for the current season.

“Farmers targeted for this transaction include commercial soybean, corn and agro-industrial farmers.

“To this end, the Issuer invites selected investors to subscribe to the Warrants,” the bank said.

According to the circular, NMB Bank will act as placement agent regarding the transaction and will distribute this information memorandum to a limited number of recipients for the sole purpose of helping those recipients to decide whether they wish to proceed with the purchase. effects.

“The issuer may increase the limit from time to time by creating additional invoices in accordance with the terms of the trust deed,” the bank said.

The circular pointed out that the minimum subscription amount for invoices will be $ 1 million and will be issued in certified registered form, serial numbered with no interest coupons or receipts attached.

Agro-bills will have a duration of 12 months and a base rate of 25 percent per year. “Monthly inflation will be applied for the revaluation of invoices. Interest to invoice holders will be paid quarterly in arrears taking into account the base rate plus the cumulative monthly inflation for the quarter in question. “

“A cap of 35% per annum will apply to investor performance and all items.”

According to NMB, the Agro Bill will offer potential investors an opportunity to diversify the composition of their portfolio as well as overall risk reduction. Invoices will bear the prescribed asset status upon issuance.

The Agro Bill comes at a time when farmers were calling on government and other agribusinesses to speed up the funding process to ensure farmers don’t miss their planting deadlines for the 2021/22 farming season.

Weather experts predicted that Zimbabwe would receive normal to above normal rains during the current season until the last half of the 2021-2022 agricultural season – January – February – March (JMF) (2022).

Before the rains start, the government distributes seeds and other agricultural services through programs such as the Pfumvudza / Intwasa Conservation Program, the Presidential Input Program, the National Crop Productivity Improvement Program (better known as Command Farming), more irrigation, the livestock growth plan, and the farm mechanization program, all of which contribute to better harvests.

CBZ Agro Yield has also supported farmers through the financing and distribution of inputs.

CBZ-Agro-Yield is an agricultural finance initiative for CBZ Holdings, in partnership with the government to sponsor the cultivation of soybeans and corn.

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