AfDB approves $20 million for farmers
About 10,000 farmers and commodity suppliers from Malawi, Mozambique and Zimbabwe are due to receive $20 million from the African Development Bank (AfDB) so they increase revenues and produce quality crops for export.
This is part of Meridian’s 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 concerned.
In a media statement, AfDB says the facility will be used to provide funding to purchase farm inputs for farmers to ensure consistency and quality of the commodities being supplied; purchase of soft commodities from over 10, 000 farmers in Malawi, Zimbabwe and Mozambique.
“Meridian is also a major buyer of soft commodities from small-scale farmers using its retail network of over 120 shops spread across rural areas. African Agriculture Fund (AAF) is a shareholder, in which AfDB owns a 20 percent stake,” the statement states.
AfDB adds that the project conforms to its core operational priority of private sector development in line with the 10-Year Strategy and the Trade Finance Programme, aimed at promoting exports through support to agriculture and SMEs.
The financial package will enable the Bank to reach small-scale farmers indirectly through Meridian that understands the market in which it has accumulated a 40-year track record; understands the operational risks and is able to mitigate and manage them.
“Meridian was established in 1970 and focuses 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,” says the statement.
Meridian currently employs over 4,200 employees and is Sadc’s largest commodity aggregators as it distributes over 250,000 metric tons of goods per annum throughout the region.
Meridian’s key markets in Africa are Malawi, Mozambique, Zambia and Zimbabwe. Agriculture in these four countries accounts for approximately 32 percent of GDP and provides a livelihood to 81 percent of the population in the form of smallholder subsistence farming.
The group uses its retail outlets to distribute farming inputs to small-scale farmers such as fertiliser, seeds and hardware products.