BUSINESS REPORTER
Fintech concern AgroStrong has introduced a cattle-backed savings product as it seeks to tap into the previously marginalised communities.
Under the plan, an investor deposits money in AgroStrong. The money is pooled with that of other clients and used to purchase cattle which are bred and managed by the company’s partners—MC Meats in Zimbabwe and Beefcor in South Africa.
The cattle are slaughtered and the meat sold using MC Meats and Beefcor’s retail channels. The investor has an option to withdraw their money after six months or reinvest.
Vhusi Phiri, Agro Strong board chairman, said the team has lots of experience in managing risk or partnership and has combined forces with two reputable firms.
“In Zimbabwe we partnered MC Meats, one of the biggest integrated firms with farms and abattoirs. In South Africa, they have partnered Beefcor which at any given time has about 15,000 cattle. It has taken us two years to get all the licenses required in Zimbabwe and South Africa,” Phiri said.
He said the company was looking at an asset one can save in the short or long term.
“You will be able to buy insurance backed by an asset. We are introducing cattle backed financial services—insurance, loans,” he said.
Phiri said Agro Strong is finalising discussions with financial institutions which would enable investors to get loans at better interest since “this is a secured loan”.
Janice Sambaza, the fintech’s chief investments officer, said the cattle backed product has been achieving a targeted return of 16% per annum since inflation, impacted by fluctuations in beef prices.
“We are guaranteeing a return of 14 to 16% per annum depending on what happens on the beef market.
AgroStrong’s CEO Bekithemba Nkomo said shareholders and investors have raised US$150,000 in three equal batches since May last year which was used to purchase steers. In Zimbabwe, Agro Strong has 300 cattle under management, Nkomo said.
In South Africa, the company entered into a custom feeding contract with Beefcor. Nkomo said R1.4m was raised from shareholders for the first batch of 100 cattle to be custom fed through Beefcor.
Agro Strong is working on two cattle-backed insurance products underwritten by Old Mutual.
