Stanbic Bank set to boost agribusiness financing

A vibrant agricultural sector is what Uganda’s economy needs to thrive. Due to the exigencies of the Covid-19 pandemic, the annual Seeds of Gold Farm Clinic will be held virtually at Mukono Zonal Agricultural Research and Development Institute (Muzardi) station in Ntaawo, Mukono District.

The devastating effects of the pandemic on agriculture have stifled productivity, making it important to focus on agribusiness financing in order to drive expansion and achieve competitiveness.

Stanbic Bank Uganda, who are prime sponsors of the event that will be televised on NTV starting 4pm, will bridge the information gap on financing while unveiling related products on offer.

In efforts to financially support and uplift the country’s agricultural sector, Stanbic Bank has partnered with the Seeds of Gold Farm Clinic to enable farmers have access to financial boost while purchasing quality seeds and improved farming machinery.

Seeds of Gold talked to Melisa Nyakwera, head of agribusiness at Stanbic Bank Uganda, to tell us more about their agribusiness financing product and involvement in the Farm Clinic initiative. 

Why did Stanbic Bank decide to partner and host the Seeds of Gold Farm Clinics this year?

Stanbic Bank continues to play a crucial role in providing financial support to Uganda’s agricultural sector and up to Shs450b of the bank’s total loan book has been directed towards formal agriculture financing across the value chain. 

For two years in a row, Stanbic Bank has partnered with the Seeds of Gold Farm Clinic project to address challenges faced by the agricultural sector.

Remember  agriculture is the backbone of this country’s economy contributing 23 per cent of our Gross Domestic Product (GDP) and employing more than 65 per cent of the population, especially women. 

What do you hope to achieve from this partnership?

We would like to indoctrinate the makers and shakers of the agriculture sectors to adopt the amazing Stanbic Bank financial products and we are keen to support their growth of not only their businesses but to the individual selves.

These key players include: the input seed suppliers, equipment, agro-dealers, primary producers such as individual farmers, cooperatives and commercial farmers, commodity traders, aggregators, and agro-processor, and all formal stakeholders involved in the agriculture value chain.

How has Stanbic Bank supported the growth of the Agriculture sector?  
Stanbic Bank has been instrumental in providing affordable loans and credit facilities to individual farmers, cooperatives, large-scale plantation owners, farm suppliers, and other stakeholders. We broadly ensure that we finance them through mechanisation and sale of produce.

The bank has enhanced the modernisation of the sector as a means of improving productivity, efficiency, and value addition in the agribusiness supply chain.

For instance, a farmer may want to buy machines like tractors, combine harvesters, planters, coolers, dryers, cleaners, haulers. Through this arrangement, the farmers do not need to give us collateral. The machine acquired will form the collateral through the Asset Financing Facility. We can also finance all these items through the Agricultural Credit Facility in partnership with Bank of Uganda at an interest rate of 12 per cent. 

We intend to offer holistic financial solutions to our customers, which extends beyond just banking and includes providing insurance solutions aligned to customer needs through a Bancassurance service team.

We have agricultural insurance (animal and crop) and offer insurance for physical assets such as agricultural machinery, warehouses, and storage facilities.
We can also provide working capital and commodity financing, especially to those who are involved in grains processing and export. Other farmers might be interested in expanding the farm but lack sufficient money to buy more land and develop it.

There is also a financing product for this, which also covers fencing the land, installing feeders, or adding on the production size of for example a poultry farm. 

How does one qualify to access funding from Stanbic Bank?
To qualify for funding, you must have a good credit history which can be demonstrated in affiliation such as SACCOs.

For instance, if one gets a contract to supply grain to the World Food Programme (WFP), we can finance that contract to allow you to supply. Depending on the risks and off-takers, we can give you secured or unsecured financing.

If the risk is low – for instance, you have a contract to supply Agro-ways in certain tonnage and they have given you a contract. We know this is simply because you buy the grain then you sell it to Agro-ways and they in turn pay through the bank, so the risk, in this case, is low.