Times Of Swaziland: STANDARD BANK INTRODUCES 4 AGRI-BUSINESS LOANS

STANDARD BANK INTRODUCES 4 AGRI-BUSINESS LOANS
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Mhlengi Magongo on 12/12/2022 08:21:00


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.