CBZ to engage govt over farmers loans

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CBZ Holdings (CBZ) is in talks with the government to ensure farmers can use their land as security to access advance loans for agriculture operations.

CBZ Holdings (CBZ) is in talks with the government to ensure farmers can use their land as security to access advance loans for agriculture operations. VICTORIA MTOMBA BUSINESS REPORTER

Some farmers hold 99-year lease agreements from the government as proof that they own farms which financial institutions have described as “unbankable”.

RBZ chief executive officer John Mangudya recently said 27% of the bank’s loans translating to approximately $300 million were advanced to farmers last year.

Mangudya said since 2009 the group’s lines of credit increased to $289,6 million in 2013 from $33,9 million in 2009.

The agricultural sector has since the 2012-2013 farming season been receiving the bulk of advance loans from the bank followed by distribution and services sector.

Although the agriculture sector received the bulk of loans, it only contributes 3% to deposits of CBZH while the service sector contributes 24% to its deposits.

“We are negotiating with the government to see if we can assist our clients. We want to have a lease within a lease,” he said.

For the full-year to December 2013, CBZH’s total advances were up by 20,3% to $1 billion while total deposits were up to $1,3 billion after increasing to 29,3%. CBZH was working towards accessing an offshore line of credit from Mauritius. Mangudya said the bank had raised $68 million from the bond market and working towards increasing it to $200 million following interest by investors.

The bank posted an 18,4% decline in profit to $37 million for the full-year ended December 2013 while its total expenditure increased by 6,6% to $88,8 million. Interest income stood at $172 million up from last year while net interest income stood $95,4million.