Maravi

(HERALD) Trust Bank releases US$4m for farmers

Trust Bank releases US$4m for farmers
Wednesday, 25 May 2011 20:10
Business Reporter

SMALL-scale farmers and rural agro-traders will receive a major financial boost after the release of US$4 million Agriculture Trade Facility by Trust Bank. The facility, with a three-month tenure, attracts an interest of 11 percent - which compares well with the prevailing interest rates averaging 16 percent being offered in the market.

Trust Bank managing director Mr Nyevero Hlupo said traders could borrow up to a maximum of US$50 000 to cover working capital, order financing, overdraft facility, debt and invoice discounting.

"Individual applicants must have a minimum age of 18, resident in Zimbabwe and a minimum of one-year business experience, to access Agritrade loans," said Mr Hlupo.
"Applicants should not be drawn from existing bank clients and where an applicant is drawn from existing clients, the loan amount sought should exceed previous loan limits and should only be earmarked for business expansion."

Clients can also access the fund for a maximum of three times.
Mr Hlupo said tobacco or cotton traders would not be eligible under Agritrade 1 funding.

"Funding is available to agro-traders only," he said. "These agro-traders should be purchasing commodities from rural and communal areas.

"Agro-traders will be required to produce a list giving details of purchase area and customers."

The agritrade loans come at a time when small-scale businesspeople are struggling to obtain working capital.

As security, applicants are required to have a form of fixed property, accounts receivable, inventory, machinery, equipment and personal assets.

Certified copies of Memorandum and Articles of Association, Certificate of Incorporation and CR14 and cash flow projections for a minimum period of 12 months are also required.

Mr Hlupo said they also require the 2009 and 2010 financial statements and certified copies of directors' identification particulars together with proof of residence and passport size photos taken within six months of the application.

Trust Bank opened its doors to the banking public in December last year after it was re-licensed by the Reserve Bank of Zimbabwe.

Trust and Barbican Bank and Royal Bank were closed in 2004 and amalgamated into the Zimbabwe Allied Banking Group.

The banks, which succumbed to the RBZ's 2004 clean-up exercise designed to rid the financial sector of speculative transactions and other malpractices.
Zimbabwe's financial sector is struggling due to low liquidity levels exposing banks to certain risks.

The sector has also failed to offer long-term financing from non-interest income, mainly due to the absence of alternative investment instruments, such as Treasury bills and other Government securities.

Meanwhile, Trust Bank is looking for US$100 million offshore for lending on the local market.

Labels: AGRICULTURE

posted by MrK @ 2:07 PM