NMB eyes ZWL$2bn kitty for agric

LIVINGSTONE MARUFU

Listed financial services provider, NMB Bank Limited, is planning to float agro-bonds worth more than ZWL$2bn this year to finance the upcoming cropping season, it has been learnt.

The bank has been supporting agriculture and last year raised ZWL$2bn to finance the sector.

“We will issue the (agro) bonds and we have to come up with a much higher figure as more customers want support on that front,” NMB chief executive officer Gerald Gore told Business Times.

The development comes after the farmers exhausted the ZWL$2bn raised last year for the 2021/22 cropping season.

“(The last cash) raised from a (ZWL$2bn) agro- bond, which was covering the last summer and winter cropping season was fully subscribed to. Right now we are now looking at additional funding,” Gore said.

Gore said NMB would mobilise more funds including foreign currency to support the farmers.

He said NMB was targeting a wide range of farmers from small scale, mid-tier  and large scale farmers in the lender’s quest  to support farmers along the value chain where the large firms sub-contract small farmers to be productive.

Locally, NMB’s interest rates range from 100% to 210% as most financial institutions are putting 10% more to the central bank’s lending cap.

“Our interest rates mainly depend on the quality of the borrower, collateral and the amount that is available,” Gore said.

Early this year, NMB received a €12.5m line of credit from European Investment Bank (EIB) for lending to Zimbabwean exporting companies, a move meant to boost capacity of local firms.

The loan facility which has a tenure of seven years is available in United States dollars through the existing NMB branch network and will be in the form of short, medium or long term.

This is one of the longest facilities that the bank has gotten as it allows it to offer short term working capital facilities or medium to long term capital expenditure to exporting entities.

The companies can approach the bank to set up production facilities and acquire new technologies as the facility will be available to support that”

The resource envelope is part of the Zimbabwe Private Sector Facility from the Impact Finance Envelope of Investment Facility which is extended by EIB to a group of financial institutions located in Zimbabwe.