KABANDA CHULU, Lusaka
STANBIC Bank Zambia says there is need to address volatility in the financial markets, as currency fluctuations has become a major aspect impacting negatively on farmers that are exposed to foreign currency imports while selling produce in local currency.
Giving an update on the support which the bank renders to the agricultural industry, Bank head of agribusiness Leon Kotze said the bank is optimistic that the agriculture sector, that is currently experiencing challenges as a result of local and external factors will improve in the medium to long term.
“The agriculture industry is highly cyclical, so we are confident that markets will improve in the medium term for tobacco, sugar cane, maize and beef that are currently under pressure,” he said in a press response last week.
He said the Zambian agriculture sector is highly dependent on imports of fertilizers, chemicals and veterinary products, spare parts and equipment amongst others hence, this makes it challenging to avoid a currency mismatch in US dollars borrowing while earning income in Kwacha.
“So the bank is constantly looking at ways to improve and find cheaper sources of funding, while longer term finance is key to successful establishment and supporting long term investments in the agriculture sector,” Mr Kotze said.
On measures to reduce the rate of defaulting, Mr Kotze said Stanbic has engaged relationship managers and agricultural specialists who work with farmers to plan according to their cash flow cycles to match loan instalments with income flows.
“Our product offering and services are tailored to fit farmer’s cyclical cash flows. The bank is open to accommodate farmers if, external factors resulted in delays of delivery or payment of products with temporary bridging finance or postponement of a payment. The key to managing delays or unforeseen events is to communicate early with the bank to ensure timely action is taken,” he said.