National Bank of Malawi (NBM) plc has introduced a Farm Infrastructure and Implements loan facility to aid eligible farmers in both the small- scale and Estate sub-sectors in acquiring agricultural equipment and other farm implements.
Making the announcement in Lilongwe, the bank’s Business Development Manager in charge of agriculture Samuel Ngwira said agriculture significantly contributes to employment, economic growth, poverty reduction, food security, and nutrition and there is a need to help fuel agricultural sector growth in order to aid the country’s development.
Ngwira explained that small scale farmers in Malawi’s agri-business sector face a lot of hurdles which include lack of access to funding for investment in agricultural equipment and other farm implements.
The Farm Infrastructure and Implements Facility presents itself as part of the solution to this problem. It will also spur salaried employees that have sizeable chunks of idle land to venture into commercial farming.
“The facility is further aimed at unlocking cash flow by assisting farmers refinance their already existing equipment,” said Ngwira.
He outlined that the facility will cover a comprehensive range of agricultural equipment such as irrigation equipment, borehole equipment, land preparation equipment, solar equipment, silos, threshers, processing and oil extraction equipment, beef and dairy equipment and any other equipment used for agriculture related activities.
Ngwira further emphasized that the facility will ease pressure on cash flows by spreading the cost over a period and pointed out that the loans would have a flexible repayment schedule with annual, bi-annual, quarterly, and monthly instalments over an agreed period.
Commercial farmers will be able to access amounts ranging between K5 million and MK200 million while smallholder farmers, clubs, societies and salaried farmers will access amounts ranging between MK2 million and MK100million.
“The loans shall be repaid over a maximum period of 6 years and may have a moratorium of up to 18 months depending on project’s needs which shall be aligned with project implementation,” Ngwira added.
The loan facility is open to all farmers regardless of whether they hold accounts with National Bank or not.