LFZ disbursed $500 000+ to rural farmers
MICROFINANCE institution Lion Finance Zimbabwe (LFZ) has since January disbursed more than $500 000 to rural farmers in a bid to promote financial inclusion among rural entrepreneurs.
LFZ corporate communications specialist Ms Rutendo Mzondo said more than 1 000 rural farmers have benefited from the Murimi/Master Farmer loan facility while more were still applying.
“We have disbursed about half a million since the projects began and so far over a thousand rural farmers have benefited and we keep adding more,” said Ms Mzondo.
She said the organisation scrutinises projects that need funding before disbursing the money to the farmers.
“We mainly consider what type of economic activity, be it crop farming or a project the rural farmer wants to borrow for. If they have a ready market for the produce and have the skills to engage in the economic activity then they are most guaranteed to qualify for the loan,” she said.
As a way of lessening the burden for the farmers, the organisation is accepting livestock as collateral.
“Considering property as the only form of collateral defeats the aspect of financial inclusion as the majority of the rural population do not have title deeds. Livestock, especially cattle have been a medium of exchange in our culture for time immemorial.
“A person’s personal wealth is measured by the number of cattle they have. They have a herd book where all their cattle are officially registered at the veterinary office and to slaughter a beast, a villager has to notify their local leadership and clear the slaughtered beast from their herd book. This is akin to an asset title deed and therefore, with careful analysis, is acceptable as collateral,” said Ms Mzondo.
The Government has also proposed the Moveable Property Securities Interest Bill where the Reserve Bank of Zimbabwe will be compelled to create a collateral security register in an effort to make it easier for the informal sector to access funding from banks.
A majority of Small and Medium Enterprises and rural farmers in Zimbabwe do not have immovable assets which banks require as collateral for loans.