Azania Bank to provide 5bn/- loan to Mkulazi sugar project

Outgrower schemes, also known as contract farming are systems that link networks of unorganised smallholder farmers with domestic and international buyers.

These schemes provide benefits to players along the supply chain. Buyers can improve their control over crop supply, often at pre-agreed prices, as well as crop quality standards. And farmers can access more secure markets, often receiving technical and financial support by cultivating within outgrower schemes.

The 5bn/- loan facility from Azania Bank is part of the bank’s support government initiatives to widen economic opportunities that come from the agricultural sector, according to the bank’s Business Development Director, Nyansaho Rhimo.

According to Mr Rhimo, the loan will be provided to Magole Joint Cooperative which has a total of 115 groups and 1,200 members. “It should be noted that this loan does not mean we will be dishing out money to the groups but it shall cater for procurement of agricultural inputs and equipment depending on the needs of the smallholder farmers,’’ he noted.

Commenting on the banks initiative, the minister of State in the Prime Minister’s Office, Police, Parliamentary Affairs, Labour, Employment, Youth and the Disabled, Jenister Mhagama commended the bank for the decision to provide agricultural inputs and equipment instead of providing money. She said the loan facility would help to avoid unnecessary disputes and misuse of the money.

“I am very happy with your decision to help these groups and it is my hope that other financial institutions shall borrow a leaf from you and help others countrywide,’’ she added. The minister requested the bank’s management to provide similar chances to other groups including a 33-member group of youths who were united through the social media to form their company called KCL Company Limited.

Source: Daily News

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