STANDARD BANK INTRODUCES 4 AGRI-BUSINESS LOANS

MBABANE – Standard Bank Eswatini has introduced four agri-business loans to assist both small and large scale farmers.

Worth noting, agriculture accounts for 8.5 per cent of Eswatini’s gross domestic product (GDP) and this key sector of the economy provides food and nutrition to the 1.2 million people making up the population. The bank has rolled out a raft of financing solutions empowering both small and large-scale farmers to improve operations, contribute to food security and boost commercialisation and export competitiveness. The finance packages which are spread across the agriculture and agri-business value chain covers everything from working capital, insurance, distribution and logistics from farm to table.

Production

The loans include Agricultural Production Loan (APL), which is payable within the season, this loan can be acquired for farm inputs and production costs such as seeds, fertiliser, chemicals or fuel. The second loan is known as Medium Term Loan (MTL), the repayment period for this type is up to 10 years and this loan is ideal for capital expenses. For a sugar cane farmer, it could come in handy when replanting the fields or changing the ratoon for sustainable production and improved farming systems. The third type of loan is known as Asset Finance (AF), Standard Bank said it enables the customer to lease movable assets such as tractors and trucks, instead of saving up for the equipment over the long-term. The maximum repayment period is 60 months. For solar energy equipment, plans are afoot and the bank plans to extend the period to 10 years as this is capital expenditure.

Lastly is the Working Capital Loan (WCL), the product is tailor-made to assist farmers and businesspeople get credit repayable over a 60-month period which could be utilised to purchase stock or assets. There is also a partnership with John Deere for agricultural assets, including tractors, where farmers pay interest that is below the market rate. “Eswatini is our home and we drive her growth. This entails working closely with emaSwati and forging strategic partnerships with various entities to achieve the goal of an inclusive economy for sustainable livelihoods,” said Nomfundo Myeni, Standard Bank’s Head of Business and Commercial Clients. Standard Bank recently hosted a successful breakfast meeting at Simunye Country Club which brought together farmers in the sugar cane industry and high-value crops sector, and other stakeholders throughout the agri-business value chain. Over 100 people attended. Bringing its products directly to the customer, Mbabane Motors, the bank’s Vehicle and Asset Finance partners, also showcased a wide range of its vehicles and equipment, including the iconic Isuzu bakkies and trucks, at the venue.

Opportunity

The car dealership’s team had an opportunity to engage and hear from the farmers and the broader agriculture industry about the available comprehensive financing packages. The session proved to be a powerful platform for discussions, networking and feedback on how Standard Bank could further improve its financing solutions offering to the agriculture and agribusiness sectors of Eswatini.  Panellists included newly-appointed Eswatini Sugar Association (ESA) CEO, Banele Nyamane; National Agricultural MarketingBoard (NAMBoard) CEO, Bhekizwe Maziya; Head of Commercial Clients, Mbongeni Maziya and Head of Unayo, Vukani Dlamini. Setting the tone for the meeting, Myeni explained that Standard Bank prioritises authentically engaging with its cross-section of customers, to fully understand their experiences, requirements and aspirations.

“That is the starting point of our product design process which has ensured that as Standard Bank we continue to offer financial solutions and services that are tailor-made to meet the needs of our customers through personalised, distinctive and advice-focused value creation. Our consultants are on hand to offer expertise and guidance to our customers in the agriculture and agro-business value chain, enabling them to choose a finance package that best suits their needs,” Myeni said. She added that Standard Bank had entered into a partnership with Eswatini Royal Insurance Corporation (ESRIC) for comprehensive insurance coverage of the finance packages as a safety net against losses and shocks which are beyond the farmers’ control. “With the adverse impacts of climate change and other challenges, our farmers and the agriculture sector in general, face unique challenges, heightened risks and uncertainties to their enterprises. Our well-structured insurance options with preferential loan-linked premiums underwritten by ESRIC, go a long way in ensuring that our customers can weather the storm and protect the sustainability of their business,” Myeni said.  In another matter, Maziya urged the farmers to utilise Standard Bank’s purchase order financing and invoice discounting offerings.

Experience

“One of the biggest challenges that some service providers within the agri-business value chain experience is difficulty in raising enough capital to service a large purchase order received from a client. Standard Bank can extend credit of 90 per cent of the value of the purchase order to help the business not run into cashflow problems while meeting its contractual obligations,” Maziya said. “The repayment period is up to six months depending on the terms of payment. The same goes for invoice discounting where the Bank can offer credit of up to 70 per cent of the value of the invoice, upfront,” he said. Maziya said an eco-system value-based approach is being applied to companies such as RES Corporation and Ubombo Sugar Limited, aimed at creating efficiencies for their value chains. This includes out-growers, commercial farmers and other service providers. The intention is to replicate this with other companies that contribute towards economic growth in the country.

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