Hope as NMB Bank cuts lending rates, unveils Sh120bn plan
What you need to know:
- Nunc hendrerit metus in diam tincidunt coymmodo. Phasellus pretium pharetra nisi acEtiam euismod lectus eu nisl gravida at feugiat
Dodoma. NMB Bank has unveiled Sh120 billion more for affordable lending to farming, livestock keeping and fishing value chain at a lending interest rate of nine percent, the bank said yesterday.
Chief Executive Officer Ruth Zaipuna said here yesterday that it has cut its agricultural lending interest rate to a single digit from the 10 percent it was used to charge until the third quarter of last year.
“We have so far disbursed Sh80 billion out of the Sh100 billion that we had set aside for financing farming, livestock and fishing sectors but we have agreed with the ministry of Agriculture to allocate more funds for agricultural credit,” Ms Zaipuna said, revealing that from May 1, 2022, another Sh100 billion will be made available for that purpose.
In attendance at the press conference – which sought to highlight the bank’s agriculture financing plans and its investments in aiding the sector - was Agriculture minister Hussein Bashe.
She said initially NMB had allocated Sh20 billion to help finance construction of agricultural storage facilities across the country. That brought the total amount that the bank has allocated for affordable agricultural loans to Sh220 billion since last October. Recently, NMB revealed that in the past five years it had injected over Sh1.3 trillion into the farming economy that has also been used to finance supportive activities in the sector’s value chain.
In his remarks, Mr Bashe said he had had fruitful talks with NMB on how to work together to transform agriculture.
He said NMB and the ministry also agreed to address the challenge of post-harvest losses as a top priority.
He said the bank’s move was in line with the aspirations of the recently launched “Ajenda 10/30” agriculture renewal initiative that seeks to propel the sector’s growth by 10 per cent come 2030. It also augurs well with the aspiration of President Samia Suluhu Hassan’s administration to reduce interest rates on loans and promote credit intermediation.
“NMB becomes the second bank to peg the interest rate at less than 10 per cent. You have however gone an extra mile by agreeing to finance construction of the warehouses, which will reduce the exorbitant storage costs our farmers currently incur to store their produce,” Mr Bashe noted.
