Equity Bank Kenya and AGCO have signed a partnership agreement that will see their customers get up to 80 per cent financing.
AGCO is an American Company which owns the Massey Ferguson brand.
The credit is payable within 48 months on the Massey Ferguson tractors and accompanying implements.
Equity Bank Kenya Associate Director- Credit, Sam Ndung’u, indicated that the Bank is partnering with AGCO, one of the biggest agricultural machinery companies globally to enable farmers mechanise affordably.
Through the sole franchise holder, FMD East Africa, financing will be provided to both businesses and individuals for Massey Ferguson tractors and complimenting implements.
“We share a common goal with AGCO which is to empower SMEs and especially those in the agribusiness value chain from farmers, to processors, with the aim of assisting in the achievement of food security on the continent,” said Ndung’u.
He added that this partnership will go a long way to enable more convenient access to finance thereby creating growth and job opportunities for more people.
FMD General Manager, Fergus Robley, said partnering with Equity will provide the missing link from wishing to own and enable the farmers to actualize their plans on making farming profitable.
He added that FMD provides the machinery and professional expertise in agri-mechanisation solutions.
“The partnership will facilitate the farmers to have quick turnaround time on loan applications as well as the comfort of having quality equipment on their farms. FMD is well known for being the pacesetter in aftersales support,” he noted.
Negotiated comprehensive insurance cover
Equity Bank is giving customers who qualify for the financing to purchase the tractors under the partnership terms, a specially negotiated comprehensive insurance cover at an annual premium of 2 per cent of tractor value, through Equity Insurance Agency as part of the deal.
Massey Ferguson tractors are one of the most recognized tractors throughout the world.
These tractors have proven to give unrivalled longevity throughout Africa and are preferred by those involved in crop farming, livestock keeping and horticulture.
Equity Bank is focusing on growing the agribusiness portfolio through servicing all segments from retail, to SME, to large enterprises and corporate banking customers.
The partnership comes on the backdrop of a recent partnership between Equity Bank Kenya and European Investment Bank (EIB) and supported by the European Union, for an agriculture sector financing agreement.
The partnership will see economic opportunities for thousands of smallholder farmers across Kenya transformed through a EUR 50 million (KES5.7 billion) fund.
Focus on mechanising agriculture is increasing with Hello Tractor and the Technical Centre for Agricultural and Rural Cooperation ACP-EU (CTA) announcing a joint partnership project to increase smallholder farmers’ access to mechanization services and youth employment opportunities.
The partnership project will enable Hello Tractor to expand its services across Nigeria and Kenya over the next one year to connect 5,000 smallholder farmers to mechanization services, as well as to create jobs for youth as tractor operators and booking agents.
Best practices and lessons learned will be shared on implementing digital services for agricultural mechanization.
“We are delighted to partner with Hello Tractor in expanding its innovative digital platform to reach a large number of users that will contribute not only to modernizing smallholder agriculture and increasing productivity but also to attracting young people to agribusiness in Africa,” said Michael Hailu, Director of the CTA.
Across sub-Saharan Africa, farmers face some of the lowest rates of mechanization. Typically, within labour-constrained markets, mechanization is the solution to supplement the power gap. However, despite its benefits, cost and access have been key impediments to its widespread adoption.
Connecting fragmented farm plots to a cluster drives more equitable access to mechanization for farmers and makes serving the area profitable for tractor owners.