January 4 2019

Stanbic Bank Zambia intensifies its investment in the growth of Zambia’s agricultural Sector

Source: Lusakatimes.com

Stanbic Bank Zambia has intensified its investment in the growth of Zambia’s agricultural sector by supporting agro-value chain players.

Recently voted the best bank in Zambia by EMEA Finance and the Financial Times Banker’s awards, Stanbic has continued playing an active role in promoting sustainable national development through economic diversification.

Zambia has for the last few decades been striving to diversify its economy away from copper mining to accelerate long-term sustainable growth. One of the sectors identified as a key growth sector in the 7th National Development Plan (7NDP) is agriculture.

Keegy Zambia Ltd Managing Director Chongo Kasongole says Zambia’s agro sector will not achieve true growth without mechanisation.

He said: “Zambia is sitting at a crossroads. We have the potential to be a regional food basket; we have climatic and political stability. We also have the capacity to make agriculture one the country’s main drivers of the economy thanks to our vast land and water resources.

“However, the country is still a long way from feeding the sub-Saharan region due to inadequate investment in agriculture, hence the sector continues to face challenges that are hindering sustainable growth.”

“Some of these hindrances include low levels of mechanisation stifling production, especially among smallholder farmers. While there is urgent need to overturn this situation and improve the level of mechanisation, significant results will only be realised through concerted efforts from all stakeholders including government, value chain players, farmers and financial institutions.”

He adds: “Financial institutions have a big role to play in facilitating easier access to farming equipment through the creation of sector appropriate services and products that allow even small-scale farmers to mechanise and improve production.”

Mechanisation can increase productivity by at least 50 percent according to research data from A Green Revolution in Africa (AGRA) – an international organisation involved in improving agricultural products and supporting local farm owners and labour in Africa.

Africa remains one of the least mechanised continents on the planet with the World Bank estimating there are only five tractors for every 1,000 farmers; in stark contrast to an agricultural powerhouse like the USA that has 1,600 tractors for every 1,000 farmers.
Kasongole, who has over 24 years’ experience in industrial equipment distribution, notes the main constraint to achieving full mechanisation is the price at which these items come into the country.

“The high cost of import for agro equipment means that the retail price is usually too high for most smallholder farmers to afford. Therefore as one of Zambia’s leading material’s handling and agro equipment distributors we decided to create a service that enables businesses of all sizes including farmers to have easier access to equipment through our leasing programme.

Under the leasing programme, Keegy provides the equipment on a temporary lease basis, to allow farmers to use the machinery to improve their production, and return it after a specific period. The programme provides a more affordable and flexible alternative for farmers to mechanise and grow their business without having to purchase the equipment until they have built enough capacity to do so.

The initiative, which was launched with support from Stanbic Bank Zambia, has been well received by farmers as well as other businesses who are able to rent out modern high tech forklifts and agro equipment.

One of the bank’s focus areas is improving the agro value chain, from transport and storage to food processing, by providing flexible finance solutions as well as collateral management agreements and production loans to eligible players.

Stanbic has so far invested over US$200 million in the agricultural sector earning it the award for ‘Best Agribusiness Bank in Zambia 2017’ from the Global Banking and Finance Review.

“Looking at the success the leasing programme has had, I would like to encourage Stanbic to remain innovative and continue creating and supporting products that are meaningful to small scale farmers and businesses and help grow agriculture in Zambia, said Kasongole.

“We also offer our clients the option of clients selling their equipment back to us, which also helps them raise extra revenue. Our goal as Keegy is to provide the best industrial equipment in Zambia as well as support the growth of the country’s agriculture sector through mechanisation,” he added.

“Agribusiness has great potential to contribute to national food security, poverty reduction through employment and national GDP growth. It is therefore of utmost importance for all stakeholders to play a part in creating a favourable environment for agriculture and its value chain to grow.

We need more entrepreneurs in the agribusiness sector to stiffen the competition because it is through competition that innovation is born, and it is innovation that accelerates growth.”
Kasongole noted : “Without full participation of banks in terms of investment in agriculture and financial support for businesses in the value chain, we cannot hope to see significant growth in the sector thus derailing the country’s diversification drive.

Financial institutions must continue to bridge the gap and assist farmers and agribusinesses have easier access to finance for the benefit of the sector and the economy at large.

“At Keegy we will continue playing our part by providing the best quality material handling equipment and agriculture machinery to facilitate improved production,” he concluded.