Oliver Kazunga, Senior Business Reporter
THE African Development Bank (AfDB) has approved a $20 million facility meant to assist small-scale farmers in Zimbabwe, Mozambique and Malawi to produce quality crops for export.
In a statement, AfDB said the funding was a soft commodity finance facility designed to provide pre- and post-shipment finance along various stages of Meridian’s soft commodity value chain operations in the three countries.
Meridian is a company established in 1970 to assist small-scale farmers focus on production and supply of various agricultural inputs or outputs through a chain of vertically integrated subsidiaries in Malawi, Mozambique, South Africa, Zambia and Zimbabwe.
The objective is to help local farmers and soft commodity suppliers to grow their revenues and produce quality crops for export.
“Specifically, the facility will be used to provide funding to purchase farm inputs (mainly fertiliser) to be supplied to farmers so as to ensure consistency and quality of the commodities being supplied to Meridian; purchase of soft commodities from more than 10 000 farmers in Malawi, Zimbabwe and Mozambique.
“And, upon purchase of the soft commodities, provide working capital to Meridian to enable the company engage in basic processing of the soft commodities prior to export,” said AfDB.
The regional financier said this will enable the bank to reach small-scale farmers indirectly through Meridian, which understands the market in which it has accumulated a 40-year track record.
AfDB said Meridian also understands the operational risks and is able to mitigate and manage them.
The company employs more than 4 200 employees and is one of Sadc’s largest commodity aggregators, distributing more than 250 000 tonnes of goods per annum throughout the region.
It is also a major buyer of soft commodities from small-scale farmers using its retail network of more than 120 shops spread across rural areas.
Among its shareholders is the African Agriculture Fund (AAF), in which AfDB owns a 20 percent stake.
Article Source: The Chronicle