LFZ dis­bursed $500 000+ to ru­ral farm­ers

Sunday News (Zimbabwe) - - Finance - Wil­son Dakwa Busi­ness Re­porter

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.

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