Zimbabwean banks set aside $1bn to finance farmers
The fund is part of a governmental scheme.Zimbabwean banks have set aside nearly $1 billion to support farmers' access to finance over the 2015-16 agricultural season, as part of a governmental scheme.
The president of the Bankers Association of Zimbabwe Sam Malaba said this week that negotiations with the government were in progress for a majority of farmers to access funding.
"Banks continue to be supportive of agricultural activities in the country and clearly understand that increased agricultural production is dependent on availability of adequate financing for the sector," he told the Herald.
However, he said despite the willingness of banks to finance the agricultural sector, there were still a number of impediments, such as a lack of competitive marketing systems and structures in the country, which led to breaks in the agricultural value chain.
Banks are also concerned about over borrowing and side marketing by farmers, arguing that there is a need to ensure that farmers are able to use their receipts as security for loans from banks.
This announcement comes after Zimbabwe banks were recently accused of "sitting" on a $21 million fund destined to finance small farmers by the chief executive of the Zimbabwe Agriculture Development Trust (ZADT).
According to NewZimbabwe.com, Godfrey Zvinoira said that banks consider the fee for administering the fund "too low" and are instead "opting to lend their own money which has 18.5 per cent interest," he said.
He said he believes that local financial institutions do not have "adequate knowledge" of agribusiness financing and have a "one size fits all" model which is a "disadvantage to the farmer".