AGCO, Agriculture Company (NYSE:AGCO) , a worldwide manufacturer and distributor of agricultural equipment, has established a Retail Finance Partnership to support Zambian farmers in the purchase of farm equipment.
Finance product to offer affordable and low-rate financing
Launched at AgriTech, Zambia’s outdoor agriculture expo, the new partnership between AGCO, its national distributor BHBW Zambia Limited and the Zambia National Commercial Bank Plc (Zanaco) will provide retail financial solutions for farmers purchasing machinery from AGCO’s Massey Ferguson brand.
“Access to credit is a crucial requirement for farmers seeking to acquire the right equipment to expand and advance their businesses,” says Nuradin Osman, AGCO Vice President and General Manager Africa. “This partnership has been set up to address the specific needs of the agricultural industry which is often perceived as too high a risk for financial service providers due to its seasonal nature, irregular income streams and exposure to external factors such as the weather, pests and commodity price fluctuations.”
“AGCO understands the pressure that Zambian farmers are facing – from small-scale farmers through to commercial enterprises and large agri-projects. Together with our partners BHBW Zambia and Zanaco, we have developed a finance solution aimed at the full spectrum of farming operations which offers affordable and low-rate financing in the form of financial lease and loans.”
According to the report, ‘Scaling Up Agricultural Credit in Africa’ submitted to the Brookings Institution’s Ending Rural Hunger Project, the financial sector meets less than 3% of total smallholder demand for financing, estimated at $450 billion. In sub-Saharan Africa, only 95 of 900 banks surveyed provide financing to farmers.
The provision of finance facilities for farmers throughout the sector in Zambia is a further demonstration of AGCO’s holistic approach to advancing African agriculture through the identification of the key challenges and barriers to growth in the industry and the development of innovative solutions to overcome them. As a result of this strategy, another recent major initiative is the AGCO Agribusiness Qualification. Here the company pinpointed the skills shortage in junior management in the agricultural supply chain and established a two-year academic program focused on developing the talent, leadership and strategic expertise to further drive African agricultural prosperity.
“We are delighted to be working with BHBW Zambia and Zanaco on this retail finance initiative,” adds Mr Osman. “They have enormous experience in the farm machinery and agriculture sectors and we look forward to a successful partnership serving Zambian farmers.”
Commenting, Hennie Heyneke, Managing Director, BHBW Zambia said: “Access to retail finance is an important benefit for our customers’ business growth, enabling them to realize their farm machinery purchases, invest in the latest equipment and manage cash flow in line with seasonal demands.”
Established in 2015, BHBW Zambia supplies machinery and equipment to Zambian agriculture and industry, representing AGCO’s leading global brands Massey Ferguson®, and Challenger ®, as well as the brands Hyster and Yamaha. The company offers world-class mechanized solutions backed by superior after-sales support.
Zanaco is a leading provider of financial services in Zambia and strives to ‘bank the unbanked’. Agribusiness, a key focus area at the bank, is a specialized segment serving the agricultural value chain comprising agri-corporates, commercial farmers, Agri SMEs, emergent farmers and small-scale farmers.