A Zimbabwean commercial bank has issued bonds aimed at raising agricultural funding in the wake of a poor harvest season.
CBZ Bank Limited – partly state-owned, and listed on the country’s stock exchange – has launched two bonds to raise a total of US$80.6 million to finance maize and soya-bean farming.
According to Reuters, US$30.6 million will go towards purchasing seed, fertiliser and chemicals while the second bond of US$50 million will fund the import of chemicals and fertilisers not available locally. Both bonds have a 270-day tenor, with the first offering an interest rate of between 15% and 18% and the second, 9.5%.
With maize as the country’s staple crop and soya beans used in the production of cooking oil and animal feed, the country’s agricultural sector accounts for 17% of GDP.
As part of a government-supported programme to ensure food security, the bank procures farm products and issues vouchers enabling farmers to purchase the supplies.