Banks heed Govt’s 99-year lease call
BANKS have heeded Government’ s call that farmers armed with 99-year leases can access loans to finance their operations, but this is only upon meeting requirements set by the financial institutions.
These requirements include valuable infrastructure such as houses, sheds and mounted irrigation equipment as well as viable farming projects.
This comes as the Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya last Wednesday announced that bankers have agreed to accept 99-year leases as collateral after Government tweaked them to be transferable and bankable.
The ball is now in the Ministry of Lands, Agriculture and Rural Resettlement’s court to issue more licences as less than 10 leases were issued the whole of last year.
Under President Mnangagwa’s administration, over 400 former white commercial farmers were given 99-year leases on January 19, 2018.
The Bankers Association of Zimbabwe (BAZ) said it never had an issue with the leases but only wanted farmers to meet set requirements.
“We had never had issues with the 99-year leases, we had certain requirements we needed to be met and once those requirements were met, we were free to give loans to farmers.
The reiteration of the same sentiments that 99-year leases are now operational and bankable may see an improvement on their issuance resulting in many farmers obtaining loans to improve production levels at their various farms.
Banks have set aside $1,1 billion for the current summer cropping season but most of it is lying dormant due to lack of collateral among many farmers.
With this legal document now coming into play, more loans are expected to be issued.
Zimbabwe Commercial Farmers Union (ZCFU) president Wonder Chabikwa said 99-year leases may be a game changer in the history of the country’s agriculture sector.
“Given recent assurances by Government and banks, 99-year leases are truly bankable but there is need for the Government to speed up the issuance process to ensure all due diligence processes are done in time for a farmer to get a loan.
“We hope the issue of interest rates will also be addressed to ensure these loans can be easily repaid,” he said.
All 99-year leases are supposed to be processed and kept at the Deeds Registry to buttress their legality as collateral documents.
Government has also provided resources to do surveys for new boundaries and this is where the cadastre system or the GPS will also assist.
This will help fix new boundaries because one cannot have the 99 year lease unless there is a surveyed map. Given the more advanced technology now available, the process can be done faster than before.