EQUIPMENT LEASING FOR AGRICULTURAL OUT GROWERS

EFTA has a scheme specifically aimed at providing equipment loans to out growers. Loan funds can be used to purchase machinery and equipment, such as irrigation systems, greenhouses, ploughs/tillers, tractors, on farm storage, processing equipment etc.

EFTA typically works with agri-businesses to access their network of growers and provide loans to them so that they can scale up production, improve quality etc. We prefer to do this through an off-take arrangement with the agri-business which ensures repayment of our loan to the out grower from his/her harvest incomes. We find that this is an efficient and effective way for us to identify and reach the growers who are most likely to benefit from an injection of funding and farm technology.

FUNDING FOR AGRI-BUSINESSES AND OUT GROWERS

EFTA FUNDING FOR OUT GROWERS

EFTA WORKING IN PARTNERSHIP WITH AGRI-BUSINESSES

EFTA specialises in the provision of equipment finance to businesses and entrepreneurs in Tanzania.

We enable agri-businesses and agricultural out growers to increase their production yields and harvest quality by purchasing the equipment and machinery that they need. We also finance post-harvest processing equipment.

We work with an extensive list of approved suppliers to ensure the quality and durability of the equipment and access to reliable after sales service and advice.

Contact us to find out how we can help make a difference to your business and that of your network of growers.

Many agricultural processors and aggregators in Tanzania (‘agri-businesses’) have found markets for their produce in Europe, Asia and elsewhere and rely (to varying degrees) on small growers to supply product to meet their customers’ demand. The success of this arrangement depends on the quality, consistency and reliability of produce delivered by the small growers.

Agri-businesses typically provide support to out growers by means of training, monitoring, provision of expertise and supply and financing of seeds, fertilisers and other inputs.

EFTA, in turn, can provide loans to finance equipment that the growers need.

www.efta.co.tz

Our funding is provided in the form of an equipment lease. EFTA retains ownership of the equipment until the lease loan is fully repaid, at which time ownership transfers to the grower.

In some cases EFTA can agree a seasonal repayment plan with growers to align loan repayments with harvest income cashflows. This is most successful when operated through an agri-business buyer on an off-take basis.

EASE OF PAYMENT. REDUCTION OF RISK

ELIGIBILITY FOR OUT GROWER LOANS

Successful loan applicants will:

To find out more:Chris Oliver Out grower scheme manager coliver@efta.co.tz 0785 606193Tim Ellis Operations manager tellis@efta.co.tz 0762 554802Leonce Malamsha Arusha branch manager lmalamsha@efta.co.tz 0754 210834Alfred Ngenzi Mwanza branch manager angenzi@efta.co.tz 0767 257028Edgar Kalinga Moshi branch manager ekalinga@efta.co.tz 0755 831008

EFTA provides funding at competitive rates to agribusinesses themselves. This might be needed alongside our funding to the out growers (for example, to increase processing, packaging and cold storage capacity or to finance new business lines, processes and additions to core equipment). Our lines of credit for agribusinesses range from USD 10,000 to USD 500,000. We require no additional collateral as the equipment provides the security. We have access to high quality suppliers and a loan appraisal process that typically takes less than 4 weeks.

COMPLEMENTARY FUNDING FOR AGRIBUSINESSES

3 year loan repayment term, including a grace period of two months;

Competitive interest rates for both TSH and USD denominated loans with no hidden fees;

10% to 20% down payment depending on the nature of the equipment; and,

Potential scheduling of loan repayments to match seasonality of harvests.

Typical terms (subject to credit checking) are:

MOSHI: Jengo la NSSF, Moshi02727 50657/ 0753 891477

ARUSHA: 3rd floor, Arusha Trade Centre, Sokoine road, 0766 932697 / 0783 932697 / 0714 932697

MWANZA: Lumumba Street, Nyamagana 028 254 0429 / 0684 467473

EFTA’s typical equipment lease for an out grower begins with a 10% down payment from the borrower (20% for tractors). The lease is repaid over 36 months (in equal monthly instalments or otherwise on an agreed payment schedule), after a two month grace period. No security or guarantees are required from the borrower. Ownership of the equipment remains with EFTA until the lease is fully paid. Interest is charged at commercial rates and there are no arrangement fees or other additional charges to the borrower. Loans can be given on equipment costing between USD 3,000 and USD 50,000 (approx. Tsh 5 million and 90 million). We will lend to co-operative groups as well as individual businesses.

TYPICAL TERMS FOR OUT GROWERS LOANS

Be active, experienced growers

Have a contract or trading history with an agribusiness to buy their produce

Have adequate sources of working capital for their business

Require durable equipment with a lifespan of 5 years or more

Meet EFTA’s other investment criteria