KENYA – AGCO, US-based agricultural equipment manufacturer has inked a deal with Equity Bank to enable farmer in Kenya acquire the firm’s Massey Ferguson tractors and accompanying implements via a 80 percent credit line payable within 48 months.
The loan credit will be made through the machinery sole franchise holder, FMD East Africa, the local distributor of Massey Ferguson operating under Panafrican Equipment Group- Kenya.
FMD general manager Fergus Robley said the partnership addresses a major missing link to better farm husbandry that enables farmers to venture into commercial farming.
“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,” Robley added.
FMD will also provide aftersales services that includes making available spare parts and equipment maintenance.
In addition to that, Equity Bank is giving customers who qualify for the financing, a specially negotiated comprehensive insurance cover at an annual premium of 2 percent of tractor value, through Equity Insurance Agency.
“We share a common goal with AGCO which is to empower SMEs and especially those in the agribusiness value chain.’’
“This partnership will go a long way to enable more convenient access to finance thereby creating growth and job opportunities for more people,” said Equity Bank Kenya associate director- credit Sam Ndung’u
The partnership comes on the backdrop of a recent partnership of a 5.7billion fund between Equity Bank Kenya and European Investment Bank, supported by the European Union, for an agriculture sector financing agreement targeting small holder farmers across Kenya.
The partnership with the AGCO, has been highly anticipated by the Panafrican Equipment Kenya to boost business.
During the official opening of its US$5m offices in Nairobi last week, Panafrican Equipment Kenya general manager Greg Jackson, revealed the equipment business had been receiving hits over the last four years due to the cut on government spending, cycles of state’s payment to contractors and interest rate cap.
This forced the firm to run on Panafrican Finance, the company’s funded structure, however serving large-scale contractor clientele due to high credit risks on other segments.