BancABC’s agreement with the Africa Agriculture and Trade Investment Fund (AATIF) sees US $25 million funded risk sharing facility becoming available to agriculture.
ABC Holdings Limited, the parent company of BancABC, has announced that following an agreement with the AATIF, it will increase lending to the agricultural sector across Botswana, Mozambique, Tanzania, Zambia and Zimbabwe.
Making the announcement this week Francis Dzanya, Chief Operating Officer of BancABC, said that the agreement signed with AATIF would see US $25 million 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.
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,” Dzanya said.
The Chairman of AATIF Thomas Duve added that the AATIF risk sharing 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 % AATIF pari passu risk participation initially covers an incremental agricultural lending portfolio of up to US $11 million, with the remainder being extended as a senior loan.
This risk participation limit may be raised going forward, subject to a successful roll out of the program.
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 Dzanya says it 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,” he concluded.