23 November 2012

Zimbabwe: Agribank to Disburse U.S $30 Million From IDC

THE Agricultural Bank of Zimbabwe (Agribank) will next month start disbursing the US$30 million loan facility it secured from the Industrial Development Corporation of South Africa (IDCSA), director of marketing and business development Joseph Mverecha said.

Mverecha told businessdigest this week the bank had already received approvals from IDC and from Export and Import Credit Insurance for the line of credit.

The loan, would target companies in the agro-industry such as those in seed and fertiliser production, horticulture, cotton and dairy.

Agriculture is among many sectors of the economy currently struggling due to financial constraints.

Agribank received a similar facility last year which was disbursed to several productive sectors. About a third of the funds were disbursed to agriculture and this is expected to be the same case this year with the US$30 million loan.

On the progress made on the privatisation of the bank, Mverecha said the State Procurement Board had approved the appointment of a financial adviser to the process and evaluation was expected to start by the first quarter of next year.

The bank, which is to be privatised according to cabinet approval of May 2011, intends to maintain its bias towards the agricultural sector. The privatisation exercise will see government, the sole shareholder, retaining 51% shareholding after disposing of the remaining stake to a strategic partner.

The bank announced that privatisation was part of its plans to raise capital to comply with the US$100 million minimum capital requirements stipulated by the Reserve Bank of Zimbabwe this year.

Banks must comply by having minimum capital of US$25 million by end of December this year and US$100 million by end of 2014. Agribank as of August this year was capitalised at US$13,7 million.

In the half year ended June 30 2012, the bank recorded a loss after tax of US$2,4 million, which it attributed to increased operating expenses. Agribank last year invested US$2,7 million in ICT upgrade and branch connectivity, which increased operating costs and resulted in the loss.

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