Investors have extended US$14,5 million to the Agricultural Bank of Zimbabwe (Agribank) for onward lending to A2 farmers this summer cropping season.
Government also weighed in with US$4 million to help recapitalise the bank.
Agribank chief executive Mr Sam Malaba told The Sunday Mail that pension and insurance companies were among investors that pooled the US$14,5 million which farmers will access immediately.
“Those who will access the loans are Agribank members (account holders). We have already started disbursing the money,” he said.
Mr Malaba, who is also Bankers’ Association of Zimbabwe (Baz) president, said commercial banks were also lending to farmers.
He, however, referred questions regarding the use of 99-year leases as collateral to individual banks.
A survey by The Sunday Mail showed that CBZ Bank is only recognising houses and other immovable property as collateral.
The loans must be repaid within one year at an interest rate of 18 percent per annum.
ZB Bank is only accepting title deeds to immovable property and a six months bank statement.
The loans are payable after harvesting at an interest rate not exceeding 20 percent per annum.
Stanbic Bank is only lending to farmers who own industrial properties or other fixed assets.
The loans should be repaid within a year at 15,85 percent interest per annum.
Barclays Bank is only giving personal loans that are not specific to farmers.
Zimbabwe Commercial Farmers’ Union president Mr Wonder Chabikwa said most farmers were failing to meet loan application requirements.
“Most A2 farmers do not have houses or industrial properties, especially those who are new to farming. But still, banks want such properties as collateral, and farmers are failing to get loans because of that,” he said.
However, Agriculture, Mechanisation and Irrigation Development Deputy Minister Mr Davis Marapira said A2 farmers actually have three options to fund their farming operations.
He said they can choose to apply for bank loans, engage in contract farming or apply for funding under the US$2 billion Lasch input support programme, an initiative that Zanu-PF is running with partners.
“A2 farmers should join contract farming or secure bank loans. The Lasch programme has also started giving loans and several farmers are forwarding applications.
“The loans are repaid after harvesting. This enables farmers to buy inputs this season and pay after profits.”
Commercial banks continue to turn away A2 farmers who apply for loans on the strength of the 99-year leases.
Government is making moves so that the leases can be accepted as collateral.
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