Agribank to manage US$100m mechanisation facilities

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LIVINGSTONE MARUFU

Government says its mobilised US $100 million  mechanisation facilities  will be  administered by Agribank to ensure transparency and efficiency in the distribution of farm equipment.

Agriculture Deputy Minister Vangelis Haritatos yesterday said the facilities comprise of John Deere at US$50million and US$52 million from Belarus.

“Agribank will work on a commercial basis. We will look at people who can pay. We don’t want to give to people who can’t maintain those tractors. As a ministry we know where the equipment is needed but the bank will monitor who will access this equipment. The equipment is comprised of combined  harvesters and tractors,” Haritatos said on the sidelines of the banks annual general meeting held in Harare Thursday.

Agribank CEO Sam Malaba said the bank will do proper due diligence and trace the records of the farmers

“We will use the credit reference bureau to find which farmer is creditworthy. Apart from that we look at whether you are productive. We do that in a transparent manner. We will make sure that we put efficiency in identifying the beneficiaries,” Malaba said.

Commenting on the bank’s performance for the  five months ended May 31 2019, Malaba said the bank recorded a profit of ZWL$4.6 million above the budgeted profit of ZWL$3.8 million indicating a positive variance.

“This  performance was on account of growth in business loans towards agriculture and related value chain. Growth in the customer loan book also contributed to the positive interest income performance compared to budget,” Malaba said.

Cost to income ratio was 75 percent compared to a budget of 80 percent, while the interest income at $10 271 611 for the period was 2 percent above budget.

However, total non-interest income at ZWL$ $14 503 107 for the period under review was below budget by 11 percent, mainly due to lower customer transaction volumes than  anticipated on the bank’s various delivery channels.

Total assets closed at ZWL$342.4 million with loans and advances contributing 46 percent, whereas Treasury Bills contributed 22 percent of total assets.

Total retail deposits were ZWL$117.5 million mainly driven by tobacco inflows and merchant point of sales deposits.

Meanwhile, management is of the view that the operating environment will remain depressed driven by inflationary pressures that will translate into increased pressures to raise staff salaries.

“There is pressure on staff and other expenses as inflation continue to rise. Revenue growth is going to be difficult given the tough operating environment will affect quality loan book growth as credit worthiness of customers’ declines.”