Stanchart Avails $750bn to New Farmers

Source from:  The Herald (Harare) 03/14/2005

STANDARD Chartered Bank Zimbabwe has thrown its weight behind the land reform programme by availing $750 billion to A1 (communal and small-scale) and A2 (large-scale) farmers this current season. This comes as a relief to Government, which was providing most of the agricultural inputs, including seed, fertilisers and equipment, to beneficiaries of land reform. Of the $750 billion, the bank arranged offshore credit lines of about US$65 million to support the purchase of tobacco and cotton. Nearly 70 percent of the local money lent to farmers was at concessionary rates well below the bank's minimum lending rate. In an interview, Standard Chartered chief executive Mr Washington Matsaira said: "The bank is aware that there are many serious new farmers who would want to make a long-term and sustainable business in this sector. We are keen to support these serious farmers, as they would clearly be aware of the need to manage the many risks that afflict any business. "As custodians of public funds, it goes without saying that our lending policies must be robust enough to ensure that those farmers we support are successful." Standard Chartered's support for the 2004/2005 season saw 17 500 hectares of summer crops valued in excess of $1 trillion, together with 45 000 animals - mainly cattle - worth $52 billion being produced for the market. Mr Matsaira said this was testimony to the bank's commitment to playing a key role in supporting one of the key industries that have a major role in the economy of Zimbabwe. Most traditional banks had tended to stay away from financing the new farmers as they regarded the land reform programme as a political project and not an economic opportunity. Through the cotton intermediaries, Standard Chartered has supported as many as 50 000 small-scale cotton growers across the country and about 350 A1 tobacco growers. The bank has on its books about 300 A2 farmers. "The bank has been on a learning curve with the A2 farmers and feels it has the appetite to do more, especially for those who are serious about their business and those who realise the long-term commitment that is necessary to ensure success," Mr Matsaira said. The bank has also put in place several initiatives to strengthen its support to agriculture such as the reintroduction of term loans of up to three years for producers to purchase essential capital items. "The bank will endeavour to make it easier to evaluate proposals from the new farmers. We are aware that most new farmers will not have a track record/history to support their proposals and the bank will make an effort to accommodate them, but without compromising on risk," said the Standard Chartered chief executive. The bank is strengthening its team in the Agricultural Business Unit to include components that can give more direct field support to A2 farmers to cover both finance and operational skills. "The team has used the last few years to learn and has adapted its policies and activities to suit the changes in agriculture in Zimbabwe. "One of our values is responsiveness, and we would like to believe that we have been responsive to our customers' needs not just in agriculture, but also in other areas," said Mr Matsaira. Last year, Standard Chartered introduced workshops that are held for A2 farmers to provide information and guidance on issues such as cash flow, risk management and farming projections. "In 2005, there will definitely be more of these workshops, which have proved to be of benefit to both parties. "The bank recognises the central place which agriculture has in the economy of Zimbabwe. Most of our business planning will take the needs of this sector into consideration as we continue to be the right partner for all our customers," said Mr Matsaira. Enditem