99-year leases now bankable

THE 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.

Our Harare Bureau 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-yearleases 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.

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.”