The Sunday Mail
Mr Francis Macheka (FM) was last week appointed chief executive officer of the AFC Holdings Group. He was previously the institution’s executive director for retail banking and agricultural development. The Government recently reconfigured AFC Holdings, expanding its mandate to cover the entire agriculture sector value chain as part a reform programme geared to transform the sector. Our Senior Reporter, Leroy Dzenga (LD) , reached out to Mr Macheka to take stock of the progress regarding implementation of the new mandate.
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LD: Since the reconstitution of AFC in April, how much support has the institution extended to farmers?
FM: Following the launch of AFC Holdings and its subsidiaries by President Mnangagwa in April 2021, the board and management set out to secure all the regulatory and compliance licensing as per requirements of the Banking Act as well as the Insurance and Pensions Act.
The AFC Land and Development Bank of Zimbabwe (AFC Land Bank) was recently capacitated by the Government and is currently processing applications for summer cropping.
These initiatives will be expanded going forward, with particular reference to the winter and summer cropping season next year.
The AFC Holdings (and its subsidiaries) is expressly committed to the pursuit of the mandate by the Government for agriculture and food systems transformation as part of Vision 2030, towards a prosperous and empowered upper-middle-income society.
LD: Can you outline how AFC’s farm equipment leasing house operates and how farmers can benefit from the initiative?
FM: The AFC Leasing Company mandate is to provide agricultural mechanisation solutions to all categories of farmers from communal, small scale and large scale farmers.
Our aim is to provide mechanisation services from land preparation, planting, crop care, harvesting and post-harvest technologies.
These services are available to all farmers.
Farmers can approach the AFC Leasing Company requiring a service, we in turn visit the farm or plot inspect the land, determine the appropriate mechanisation operation together with the farmer.
We then submit our proposal to the farmer and once the farmer pays we carry out the service.
The payment is done in our local currency.
The farmer also has an option to pay for our services using products, for example grain.
Every farmer is eligible to access our services.
Small holder farmers with small pieces of land can be aggregated when they access our services.
LD: There are some sub-sectors which are making a productive rebound, like horticulture. What plans do you have for funding horticulture in Zimbabwe?
FM: AFC Holdings, through the AFC Land Bank and AFC Commercial Bank will support the Government’s Horticulture Promotion Programme to revive production and productivity in the horticulture sector.
The AFCH Holdings Group will also participate in the US$20 million Horticulture Revolving fund being implemented by Government.
LD: We have witnessed increasing interest in agriculture among youths. Do you have funding mechanisms targeting young people who in most cases do not have collateral?
FM: Yes, we have a deliberate approach towards ensuring that previously marginalised segments of our population such as the youth and women are major beneficiaries of our funding programmes.
In our first support funding structure for inputs in 2021, the majority of clients we are working with are young farmers.
We work with the youth and women groups to ensure they access the necessary funding to spur growth of their operations.
LD: How is AFC handling the bankability or lack thereof of 99-year leases? Are farmers able to use them to secure funding from the bank?
FM: Notwithstanding the outstanding issues still to be resolved between the Government and Bankers Association of Zimbabwe over the bankability of the 99-year lease, the AFC Holdings, as a Government principal vehicle for agricultural financing and development, has given priority to non-collateral financing particularly through the AFC Land and Development Bank.
This, therefore, means that access to credit will be available to all types of farmers (Resettled, A1, A2, Communal) with no collateral requirements.
LD: When President Mnangagwa launched AFC, he said the bank has to accommodate farmers of all scales. I would like to find out how you have been working with communal farmers?
FM: The AFC Holdings modus operandi is to pursue agricultural transformation while leaving no one and no place behind.
Our operations are decentralising in provinces to ensure maximum and effective coverage across all the country’s 10 provinces.
LD: Tobacco is one of Zimbabwe’s biggest foreign currency earners, what support is AFC offering to tobacco growers?
FM: Over the past several years, the bank has been actively supporting smallholder tobacco farmers by providing facilities through merchants.
The bank has assisted over 14 000 farmers with both Capex and working capital facilities. The AFC holdings will sustain support to smallholder farmers as well as enhance local participation.
LD: Outline the institution’s major milestones since its launch in April?
FM: AFC Holdings has made progress in operationalising its subsidiaries.
The AFC Commercial Bank has taken up all Agribank functions and is currently rebranding.
The AFC Land and Development Bank is in the process of establishing its governance structures and also engaging both private and public sectors for funding.
The AFC Leasing Company has taken up functions of the SPV (Special Purpose Vehicle) and rebranding is also underway.
Governance structures for the AFC Insurance Company are being finalised to enable commencement of operations.
LD: Do you have women-specific agriculture financing facilities and how do they work?
FM: Yes, we have a deliberate approach towards ensuring that previously marginalised segments of our population such as youth and women are major beneficiaries of our funding programmes.
In our first support funding structure for inputs in 2021, the majority of clients we are working with are youth groups.
We will be working with youth and women groups to ensure their members access the necessary funding to spur the growth of their operations.
LD: Have you directed funding towards any value addition projects?
FM: This remains one of our key strategic focus areas as it is a key driver of agriculture production subject to availability of funding.
LD: What challenges have you been facing since the launch?
FM: Since launch of the AFC Holdings, by His Excellency President Mnangagwa in April 2021, the group has not faced any significant challenges.
The group has made progress towards the following:
◆ Putting in place governance structures for the group and its subsidiaries;
◆ Meeting regulatory and compliance requirements;
◆ Making preparations for summer cropping; and
◆ Engaging the shareholder for capitalisation.
