Lesotho PostBank has signed a memorandum of understanding with The Ministry of Finance (as Guarantor) and Ministry of Agriculture and Food Security under a partial credit guarantee scheme whereby the Bank will advance vehicle finance specifically for the purchase of tractors and their accessories to eligible borrowers at the preferential interest rates as agreed to herein.
The guarantor will open an investment account with the Bank and deposit an amount up to M50 million in it, which the account will hold the partial credit guarantee facility funds, and once opened, the guarantor shall not have access to the funds until the duration of the Tractor and its Accessories Finance advanced to the borrowers has lapsed with no outstanding fees pending.
Out of the M50 million that the guarantor has deposited with the Bank, farmers will be provided with thirty percent (30%) as subsidy on the total cost of the tractor and its accessories to help keep the price of the tractor and its accessories at affordable prices.
Farmers will make a (written) request /application to the Bank and upon due diligence, the Bank will submit a recommendation letter to the office of the Deputy Principal Secretary (DPS) at the Ministry.
The Bank is under the obligation to assess affordability to ascertain whether the borrower qualifies for a Tractor and its Accessories Finance in accordance with this agreement in conjunction with the Bank’s policies and processes.