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Africa Moyo Deputy News Editor
AGRIBANK has been selected as the agent for John Deere, which is keen to avail up to US$50 million to fund the modernisation of local agriculture to ensure high yields and food security.
The bank is now working with Government to thrash out the finer details of the deal.
John Deere, a globally renowned agriculture, construction and heavy -duty equipment manufacturer, dispatched its top officials to Harare in February to meet Government officials.
They discussed a number of issues including modalities aimed at guaranteeing food security through mechanised farming.
John Deere also wants to capacitate farmers through training and general upskilling.
The aspiration is that eventually, farmers should create wealth for themselves and the country through running farming as a business.
Details of the deal, on whether or not Agribank would be extending on-balance sheet or off-balance sheet financial support to farmers, could not be immediately ascertained as negotiations are yet to be concluded.
Agribank CEO Mr Sam Malaba confirmed in a telephone interview that the bank had been selected as the John Deere agent.
“It is true but it’s work in progress,” said Mr Malaba.
Pressed to give the details of the arrangement, Mr Malaba said discussions were still in going on and no position had been arrived at.
“We are still finalising the papers with the Government; that is why I am saying it’s work in progress.”
If the deal sails through, it will help Agribank consolidate its role as a top funder of the agricultural sector.
Last year, Government demanded that the bank should stick to its core mandate of financing agriculture so as to increase productivity.
For the year ended December 31, 2018, Agribank’s loan to deposit ratio was 81 percent compared to 78 percent in the prior year driven by loan book growth.
The rise in the loan to deposit ratio reflects Agribank’s growing support to agriculture through on-balance and off-balance sheet facilities.
Due to increased lending, Agribank recorded a profit of US$13 million last year compared to the US$8 million posted in 2017.
The profit was driven growth in non-interest income as well as interest income, on the back of a marked loan book growth.
Interest income went up by 21 percent from US$31 million in 2017 to close last year at US$37 million.
The coming in board of John Deere, and its potential investment comes on the back of President Emmerson Mnangagwa’s call for investment into the country.
Since November 2017 when President Mnangagwa was sworn in, investors have flooded the country with a number of projects in energy, mining, roads and aviation, already underway.
This has created several jobs for citizens in line with the President’s desire to create “decent jobs”, and the creation of an upper middle income economy by 2030.
Agriculture, mining and tourism have been identified as catalysts for economic revival and job creation.
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