Standard Bank and Ofid launch agriculture financing facility
Published: 31 March, 2010
Development
South Africa’s Standard Bank and the Opec Fund for International Development have launched a smallholder risk sharing agreement aimed at making financing more accessible to smallholder farmers and small and medium sized agricultural producers in sub-Saharan Africa.
It is expected to assist up to 750,000 farmers and small business owners in Ghana, Mozambique, Uganda and Tanzania over a three year period, making available up to $50m in the first year, $66m in the second and $100m in the third year.
The sector has previously been considered high risk for such lending facilities due to the remoteness of agricultural customers, lack of traditional security, ill-defined property rights and climate risks, says Jacques Taylor, head of agricultural banking at Standard Bank. “Through agreements such as this, there is an opportunity to combine the power of partnerships with innovative funding solutions to mitigate the lending risks facing commercial banks in this sector.
“Looking at the ‘Green Revolution’ in South East Asia and Latin America, history has proven that agriculture is the engine for economic growth in any developing economy,” he says.
