HARARE, April 8 (The Source) – BancABC has entered into a $25 million facility with a German backed fund to finance agriculture in the region, a bank official said on Tuesday.
The funds will be spread in the five countries BancABC, the banking unit of ABC Holdings, operates in.
In a statement, BancABC Zimbabwe chief operating officer Francis Dzanya said the partnership with the Africa Agriculture and Trade Investment Fund (AATIF) seeks to increase lending to the agricultural sector across Botswana, Mozambique, Tanzania, Zambia and Zimbabwe.
“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.
“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 chairman Thomas Duve said the risk sharing arrangement will 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 risk participation initially covers an incremental agricultural lending portfolio of up to $11 million, 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 program,” BancABC said.
The AATIF is a public-private partnership founded in August 2011 and dedicated to boost Africa’s agricultural potential for the benefit of the poor. The AATIF is backed by the German government, the German development bank KfW, Deutsche Bank as well as other private sector investors.