By Our Reporter
Equity Bank Uganda has launched their structural Commodity Finance product in Arua. The new product is a financing solution aimed at supporting the growth of agribusinesses and smallholder farmers in West Nile.
The structured commodity finance loan will allow agribusinesses to borrow against their agricultural inventory which can be used as collateral for security and repayment.
Agribusinesses stand to benefit from SCF by receiving financing to ensure that cash flow is available for maximum output; with the intention of repaying the loans once sale of the agricultural produce is complete.
Commenting about the new financing solution, Equity Bank Uganda’s Head of Retail Banking, Mr. George Kato said, that “with the new Structured Commodity Financing, farmers and agribusiness SMEs can now effectively manage their liquidity and mitigate against risks related to the production, purchase and sale of farm outputs.”
Working with the farmers, Equity will isolate assets which have relatively predictable cash flows attached to them through price discovery and discounting. The agribusinesses will then use these to mitigate risk and secure affordable credit with flexible repayment terms.
With the new facility, customers can now access a loan amounts of between shs 30 million to shs 5 billion at competitive interest rates per annum determined on a case-by-case basis and repayable within flexible periods as agreed during the application process.
Other than SCF financing, Equity offers farmers various financing solutions including production loans which aims at improving crop and livestock production, asset finance loans for farm machinery such as tractors, marketing loans and processing loans which allows them to add value to their farm inputs and increase sales.
