Farm­ers ad­vised to ex­tend col­lat­eral space

Chronicle (Zimbabwe) - - Front Page - Oliver Kazunga

FARM­ERS have been ad­vised to ex­tend col­lat­eral space by sur­ren­der­ing im­mov­able prop­erty as se­cu­rity when bor­row­ing loans to fi­nance pro­duc­tion amid con­cerns banks are still not ac­cept­ing the 99-year leases.

De­spite a re­cent an­nounce­ment by Gov­ern­ment that farm­ers with 99-year leases can now ac­cess loans from banks to fi­nance agri­cul­ture, it emerged dur­ing a ple­nary dis­cus­sion at the just ended Con­fed­er­a­tion of Zim­babwe In­dus­tries (CZI) an­nual congress and in­ter­na­tional in­vest­ment fo­rum in Bu­l­awayo that the 99-year leases were still not ad­mis­si­ble.

In­dus­tri­al­ist, Mr Cal­isto Jokonya, ac­cused farm­ers in Zim­babwe of not tak­ing farm­ing busi­ness se­ri­ously as they could use their houses as col­lat­eral se­cu­rity to ac­cess fund­ing from banks.

“I just think that our­selves as busi­ness­peo­ple we are not go­ing out of our way to think of ways and means to come out of our chal­lenges. If you were the banker lend­ing money, given the land sit­u­a­tion in Zim­babwe, you wouldn’t be very bril­liant to dif­fer.

“All these farm­ers we are talk­ing about in Zim­babwe have houses in the coun­try and yet they don’t want to mort­gage them be­cause they are not se­ri­ous about farm­ing,” he said.

“I think there are many ways they should be look­ing at it as farm­ers them­selves if they were se­ri­ous about tak­ing this busi­ness very se­ri­ously. At one meet­ing that we at­tended, we were told that 99-year leases were now be­ing ac­cepted and I was shocked when Ham­mond (CABS manag­ing direc­tor) raised that it still needs panel beat­ing.”

The Bankers’ As­so­ci­a­tion of Zim­babwe has said fi­nan­cial in­sti­tu­tions were com­mit­ted to sup­port­ing the agri­cul­ture sec­tor but would as­sist only those with vi­able farm­ing projects and valu­able in­fra­struc­ture. Those el­i­gi­ble for the loans in­clude farm­ers who own houses, sheds and mounted ir­ri­ga­tion equip­ment. Farm ad­dresses are taken as proof of res­i­dence at ac­count open­ing.

An of­fi­cial from the In­dus­trial De­vel­op­ment Cor­po­ra­tion (IDC) of South Africa, Mr Thokoane Tsolo, added his voice say­ing it was his view that there was a need to ex­tend col­lat­eral space to cover im­mov­able prop­erty for farm­ers to fi­nance their ac­tiv­i­ties.

“From my side I don’t see why not ex­tend the col­lat­eral space to cover im­mov­able as­sets be­cause at the end of the day if you don’t pay your debt, the col­lat­eral se­cu­rity sub­mit­ted to the bank upon se­cur­ing a loan will be for­feited,” he said.

For­mer CZI pres­i­dent Mr Kumbi­rai Kat­sande said the is­sue was not about own­ing land, but ac­cess to use the land.

“We seem to be stuck on this own­er­ship is­sue and yet else­where peo­ple are now se­cu­ri­tis­ing the leases to un­lock value in the mar­ket,” he said.

The agri­cul­ture sec­tor is one of Zim­babwe’s eco­nomic main­stays and in re­cent years, it used to sup­ply over 60 per­cent of in­puts needed by man­u­fac­tur­ers while con­sum­ing about 40 per­cent of man­u­fac­tur­ing out­put.

The sec­tor ac­counts for over 16 per­cent of Zim­babwe’s Gross Do­mes­tic Prod­uct ( GDP) while be­ing the sin­gle largest forex earner. — @okazunga

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