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ABC Holdings to raise lending to farms

According to a statement issued by the group, which is the parent company of BancABC, the increase follows an agreement with the Africa Agriculture and Trade Investment Fund (AATIF).

Other countries to benefit from the increase are Botswana, Mozambique, Zambia and Zimbabwe. BancABC's Chief Operating Officer, Mr Francis Dzanya, said the agreement signed with AATIF would see 25 million US dollars made available by the AATIF for lending through the bank's subsidiaries to a wide range of participants in the agricultural sector.

"The mission of the AATIF is to help Africans maximise the potential of the continent's agricultural production, manufacturing, service provision and trade activities for the benefit of the poor.

By making loan capital available the Fund aims to help stimulate agricultural output, production levels and add value across the entire chain of agricultural activities.

Knowledge and skills transfer is a major focus that is promoted through AATIF support for contract farming operations," Mr Dzanya said. AATIF Chairman Thomas Duve added in the statement that the fund's risk sharing will allow BancABC to increasingly step into transactions along the entire agricultural value chain ideally, with longer term funding and fair collateral policies.

According to the chairman, the 45 per cent AATIF risk participation initially covers an incremental agricultural lending portfolio of up to 11 million US dollars, with the remainder being extended as senior loan.

"This risk participation limit may be raised going forward, subject to a successful roll out of the programme," he pointed out.

"BancABC will manage the entire credit assessment and lending relationship with beneficiaries, while sharing the risk equally with the AATIF. The agreement between the two institutions was natural and offered benefits for both parties," Mr Dzanya explained in the statement.

BancABC operates in key markets in sub-Saharan Africa and has the network and experience required to ensure that funding is effectively and efficiently channelled through to the agriculture sector.

The statement said that the bank has enjoyed exponential growth across its retail and other operations and "as a bank born in Africa for Africans, have the capabilities to assist AATIF in achieving their objectives."

Author: DAILY NEWS Reporter

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