Published: 09 September 2013

The government is expected to invite bids for potential investors to take up 49 percent stake in the Agricultural Development Bank of Zimbabwe (Agribank) to recapitalise the financial institution.

In a development that is expected to result in Agribank fulfilling its mandate of lending to farmers, the proposed disposal of a 49 percent stake in the bank to raise fresh funds has reached an advanced stage.

Agribank Chief Executive Sam Malaba confirmed that in terms of the plan, local and external investors have submitted their bids for shares to government which is the main shareholder.

"There are some investors who are interested and we are waiting for their response," said Mr Malaba.

Other officials close to the transaction revealed that the government, which is the main shareholder for the institution, plans to invite potential investors to submit their bids for evaluation before the end of October.

While government is expected to retain a 51% shareholding in the bank, an investment analyst Mr Nicky Moyo says fresh capital injection is important in ensuring that Agribank performs its main role of providing long term loans for farmers.

"It is long overdue and we anticipate that something tangible will come out," Mr Moyo said.

Agribank has in the past four years experienced challenges in sustaining the requirements of farmers due to lack of funds.

The Zimbabwe National Farmers Union Vice President, Mr Garikayi Msika said the government should however ensure that the strategic partner will unlock value to the bank.

"The government should really evaluate the entire process to ensure accountability," he said.

Agribank, which released a modest set of financial results for the six months ending in June 2013, has been experiencing capital challenges in a development that resulted in the government directing the bank's management to consider a partner to recapitalise operations.

Market observers are therefore waiting to see whether the anticipated investors will put fresh funds into the financial institution.

- zbc

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