Business Development

Suspension of bank loans puts sugar industry in chaos

Sugar cane farmers affected by suspension of bank loans

By Elvis Dumba

Triangle – The government’s decision to suspend the offering of loans by financial institutions has affected the manufacturing industry which was relying on the loans for working capital.

Sugar manufacturing giant Tongaat Hullets operations are expected to be greatly affected by the decision as the company relied on the loans for advance payment for sugar cane from farmers.

Tongaat Hullets Chief Operations Officer, James Bowmaker advised the sugar cane farmers in Triangle of the latest developments that he said had a negative bearing on their work.

In a letter to the farmers, Bowmaker advised them of immediate suspension of advance payment until further notice by the sugar milling company.

“We normally fund the advance payment from loan proceeds that we access from the banks. Following the recent suspension of lending by banks, we find ourselves unable to continue offering advance payments,” part of the letter reads.

A sugar cane farmer from Chiredzi confirmed receiving such a letter and said he now faces a dilemma in finding takers for his produce,

“It’s unfortunate that decision just came out of the blue and we no longer know how are we going to sell our sugar cane since we don’t have the capacity to pay our workers. The suspension of loans is really going to affect our operations, ” Kundai Tidigu a sugar cane farmer said.

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