Agribank Puts Up Insurance Cover for Loans

Source from:  The Herald (Harare) 03/09/2005

AGRIBANK has put up an insurance to cover billions of dollars it is owed by farmers in the form of agricultural loans. The insurance programme mainly focused on tobacco and livestock. Agribank chief executive Mr Sam Malaba said his organisation had negotiated affordable premiums to cover tobacco and livestock for farmers who received loans from the bank this season. In each case, the sum issued was equivalent to the value of the loan approved by the agricultural bank. The Tobacco Insurance Policy covered risks including losses from hailstorm fires in tobacco barns as well as any other risks associated with the transportation of the crop from the field to auction floors. Mr Malaba said some $40,6 billion was extended to farmers under the tobacco finance programme. Under the livestock insurance policy Agribank, which extended loans totalling $50 billion through the livestock input scheme, would provide cover against loss of their livestock through theft and death as a result of diseases. Mr Malaba said since farmers were currently curing their tobacco crop, it would be premature to start commenting on the possible loan recovery rates on this year's crop. Agribank disbursed $494 billion for the 2004/2005 agricultural season to support various cropping, irrigation and livestock programmes for farmers. Mr Malaba said last year in January, $50 billion was distributed to 7 971 farmers to provide top-up loans for maize and small grains, while a further $182 billion was injected into tobacco as working capital. The rest of the funds were channelled into other programmes like irrigation, summer cropping and winter wheat. Agribank has, over the years, been fighting to cushion itself against losses through stringent measures including demanding collateral. Enditem