Agribank has obtained a US $30m line of credit for purposes of supporting the country’s agriculture sector. The funds, sourced from the Industrial Development Corporation of South Africa (IDCSA), were approved mid last week.
Agribank chief executive officer Mr. Sam Malaba said that the funds will go a long way towards the revival of the otherwise ailing agriculture sector in the country. According to media reports, some of the potential beneficiaries of the facility include fertilizer and chemical companies; livestock and dairy producers; soya and oil seed producers; pharmaceuticals; and water treatment chemicals.
This instance counts third in IDCSAs financial backing of Agribank since 2011 when the agency disbursed a similar amount. A year later, IDCSA also provided a US $30m, to support the economy which was recovering from hyperinflation.
Mr Malaba further explained that the latest support from IDCSA will help provide the “much needed foreign exchange” in support of the productive sectors. This, he adds, is as economic recovery gathers momentum.
Furthermore, the IDCSA line of credit comes at a time when Agribank, in conjunction with FBC Bank, is in the market to raise $40m through Agro bills aimed at supporting the 2018/19 cropping season. Since 2013, Agribank and FBC Bank have jointly been able to come up with a total of US $65m. Notably, the Agro bills have been oversubscribed over the years, enabling the two banks to pay on maturity consistently.
According to Mr Malaba, the two institutions have since doubled the Agro bills funding to US $40m. This, he says, is in support of Government’s efforts to expand agricultural production and productivity.
Agribank is expanding its support to the agricultural sector targeting US $105m agricultural financing. This is inclusive of both on-balance sheet and off-balance sheet financing.