NMB to issue Sh400bn agriculture loans annually

Dar es Salaam. As the Nane Nane exhibition continues, NMB Bank has reiterated its commitment to support farming activities through allocating Sh400 billion in loans to farmers each year.

The money goes to farmer groups, institutions, private companies, primary cooperative societies and individuals as it seeks to help in making inputs available to farmers.

The funds also help in the building of irrigation infrastructure.

This, according to a commercial manager at NMB who deals with agribusiness, Isaac Masusu, the bank’s pavilion at Nane Nane is furnished with various products that are systematically structured in according with the need of farmers in every zone.

“We look at the potential crops grown in the zone so that our services at our pavilion also reflect the farming activities in any specific area,” he said

Currently, the bank has identified few commodities for financing which are sugar cane, cashew, coffee, mixed cereals, tobacco and horticulture. However, other crops can be supported depending on how potential they are after an analysis is done to establish its market viability.

“We support the products after making a thorough analysis to establish their potentiality in terms of returns to help farmer pay the loan. If one has a plan to operate a project, we sit and evaluate it before a loan is issued,” said Mr Masusu.

He said the financial enhancement is given after the training is done under NMB Foundation for Agriculture Development to equip borrower with necessary skills to execute the project.

The support is extended across the entire value chain of the various products produced. These include co-operative societies, Agricultural Marketing Cooperative Societies (Amcos) and large processors of commodities.

The loan value depends on the activities the borrower is planning after the evaluation is done and it can range from millions to billions.

The loans are issued in two ways, through outgrowers’ schemes and Warehouse Receipt Financing (WRF). Some loans are also extended to individuals.

The Outgrowers scheme is basically preferred in areas where contract farming is practised. It suits those areas where contract farming is practised. The contract between the buyer and the farmers is what is taken to the bank and used as collateral.

On the other hand, the warehouse receipt financing is mostly used in areas like Mtwara where cashewnut farmers have benefited a lot from it during the past few years.