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Mernat Mafirakurewa Business Editor—
BANCABC parent company ABC Holdings has sealed a $25 million deal with the Africa Agriculture and Trade Investment Fund (AATIF), to boost lending to the agricultural sector in the country and the region. The funds would also be made available to farmers in Botswana, Mozambique, Tanzania and Zambia. BancABC chief operating officer Francis Dzanya said that the agreement signed with AATIF would see $25 million being made available by the AATIF for lending through BancABC 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,” said Dzanya.

“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.”

AATIF chairperson Thomas Duve said the AATIF risk sharing would allow BancABC to increasingly step into transactions along the entire agricultural value chain ideally with longer term funding and fair collateral policies.

The 45 percent AATIF paripassu risk participation initially covers an incremental agricultural lending portfolio of up to $11m, with the remainder being extended as senior loan.

This risk participation limit, AATIF said, could be raised going forward, subject to a successful roll out of the programme.
“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”, Dzanya said.

“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.

“We have enjoyed exponential growth across our retail and other operations and, as a bank born in Africa for Africans, have the capabilities to assist AATIF in achieving their objectives.

“We are proud to be acting as an intermediary for the organisation and being able to play a part in creating a vibrant, competitive agriculture sector on our continent”.

AATIF is an innovative public-private partnership founded in August 2011 and dedicated to uplift Africa’s agricultural potential for the benefit of the poor.
The Fund aims at improving food security and providing additional employment and income to farmers, entrepreneurs and labourers alike by investing patiently and responsibly in efficient local value chains.

It targets small, medium and large scale farms as well as agricultural businesses along the entire value chain which will be financed either directly or indirectly through financial institutions such as BancABC or through intermediaries. AATIF is backed by the German government, the German development bank KfW, Deutsche Bank as well as further private sector investors.