The Sunday Mail
Livingstone Marufu —
Government has approved a refined 99-year-lease document crafted after thorough consultations with financial institutions, in a move that is set to trigger massive capital injection into the agriculture sector through loans extended to farmers.
The Sunday Mail has gathered that last week, Cabinet agreed to new terms of the land title document that will see valuables on farms being used as collateral when farmers make loan applications.
The new dispensation is set to improve activities by A2 farmers whose operations were dealt a big blow by lack of credit facilities since lending institutions were reluctant to accept the leases that were launched in 2006.
In August, bankers embraced the refined 99-year leases as bankable documents and awaited Government’s approval of the instrument. Banks have been encouraging farmers to build immovable properties such as housing structures and warehouses on farms to strengthen security of tenure.
Lands and Rural Resettlement Minister Dr Douglas Mombeshora last week said, “We are happy to tell our farmers that finally, Cabinet has approved the final 99-year-leases into actual bankable documents which farmers can use to apply for loans at their respective lending institutions.
“All is now in place for all A2 farmers to apply for the 99-year leases and go through thorough processes to have title deeds.
“Now that the banks have already accepted them (as bankable documents), farmers can enter into agreements with their banks to get loans as soon as possible.
“They (leases) came into effect as soon as they were approved by the Cabinet. Those who had already applied are at an advanced stage to collect their final (99 year) leases,” said Dr Mombeshora.
Banks have pledged financial support for the expansion of farming operations and increased productivity to farmers who hold 99-year leases. The financial institutions are understood to be considering extending loans to farmers who own houses, sheds and mounted irrigation equipment.
Farm addresses now stand in as ‘proof of residence’ at account opening or at the establishment of any trading relationship with a banking institution. Bankers Association of Zimbabwe (BAZ) said banks will only offer loans that do not exceed the forced sale value of collateral to protect both borrowers and lenders.
“As banks we have agreed that for farmers to get loans, they must have stable and assured stay on the land for as long as the farmer is productive and has access to assured and stable markets for produce,” said BAZ in a statement.
“The lease allows banks, or any lender, to hold both moveable and immoveable property as collateral for loans.”
Zimbabwe Commercial Farmers Union (ZCFU) president, Mr Wonder Chabikwa welcomed the latest development, adding that there is need for a review of lending rates.
“We are happy farmers are now eligible to apply for loans at any bank using the 99-year leases,” he said.
“But despite the bankability of the 99-year leases, we are still worried with exorbitant bank interest rates of up to 18 percent, which we feel are not sustainable in the farming business.
“If banks revisit their lending interest rates to a single digit, many farmers will apply for the loans.”
According to the Ministry of Lands and Resettlement, farmers seeking 99-year leases should lodge an application at the nearest Lands district office where verifications, including field visits, are done and recommendations are then sent to the Lands provincial office for further scrutiny.
From the province, the application is forwarded to the national office for consideration by the Land Commission Board before being sent to the Minister of Lands and Resettlement.
The minister and the Lands and Resettlement legal team then sends the documents to the Attorney General’s office, which works as the State conveyance.
The documents proceed to the Deeds Registry Office for cross checking and due diligence on issues to do with farm boundaries. From the Deeds office, two copies of the 99-year lease are dispatched — one for the farmer and the other for the ministry.
