FAO, AFC launch new loan management system
AFC Land and Development Bank of Zimbabwe Limited (AFC Land Bank), in partnership with the Food and Agriculture Organisation (FAO) and the Government, have rolled out a new loan management and e-voucher system to support the country’s agriculture sector.
In a joint statement, AFC and FAO said the system was developed through funding from the African Development Bank (AfDB), under the FAO-managed Zimbabwe Emergency Food Production Project (ZEFPP), to help AFC Land Bank and the Government improve availability of certified seeds and fertiliser using ICT-based platforms and existing private sector-based distribution channels.
“The new system will help enhance efficiency in the delivery of affordable financing to increase cereal and oil seed production, fertiliser distribution and policy support to drive food security and food self-sufficiency of Zimbabwean farmers,” reads part of the statement.
The ZEFPP project was developed under the African Emergency Food Production Facility (AEFPF), a rapid response framework by AfDB to address food security and disruption of the supply of critical inputs for food production arising from the conflict in Ukraine, climate change and Covid-19.
In Zimbabwe, the project is being implemented at community and national levels to support farmers and the Government to raise food production in the short- term and build food security resilience over the medium to long term.
The main objective of the project is to increase cereal and oil seed production, fertiliser distribution and policy support to drive food security and build the resilience
AFC said its new loan management system will help enhance efficiency in the delivery of affordable financing to increase productivity on farms (File Picture)
of farmers.
As part of its contract with FAO, AFC Land Bank was supported in establishing a new loan management and e-voucher system, which went live last week. Speaking at the launch event for the new system, FAO deputy representative in Eswatini, Lesotho and Zimbabwe, Mr Louis Muhigirwa, said his organisation is dedicated to cooperating with the AFC and the Government.
“FAO has been supporting Zimbabwean agriculture since 1984 and continues to support the Government’s commitment and implementation of agriculture and trade policy reforms that create an enabling environment to make agrifood systems more inclusive, resilient and sustainable,” he said.
In May last year, FAO officialised the partnership
agreement with AFC Land Bank focusing on the promotion of innovative financing mechanisms for improved access to inputs through the implementation of a seed revolving fund.
This was to help organise agriculture systems that would enable the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development to achieve its main objectives through reaching out to farmers with limited resources and those that lack access to affordable finance to support effective crop production.
“The new loan management and e-voucher system is an integrated, digital platform solution that aids farmers to receive affordable finance that supports production of certified seed. Private sector producers in the maize and wheat seed value chain will also benefit from this facility,” AFC Land and Development Bank managing director Ms Priscilla Munyeza was quoted as saying.
“Re-payments (capital plus interest) by the targeted borrowers over an agreed period will go towards re-capitalisation of the fund to allow it to revolve and enable more of the targeted beneficiaries to borrow.”
The revolving fund will be disbursed as loans to a total of 17 248 farmers — comprising 16 800 independent individual farmers and 224 farmer groups of a minimum of 10 members — to facilitate their access to certified seed from private sector seed suppliers.
About 112 farmers under private sector seed producers and 112 farmers under contractors will also receive loans from the fund to support wheat and maize seed production directly or through grower schemes and value chain financing with offtaker arrangements.
AFC Land and Development was incorporated in April 2021 as part of the AFC Holdings Group, which also includes the AFC Leasing Company, AFC Insurance and AFC Commercial Bank.
The AFC Land and Development, a development finance institution, focuses on agriculture development through provision of financial support and access to credit for all types of farmers (A1, communal, resettled, smallholder farmers, A2 and commercial farmers) for both working capital and capital expenditure for agriculture infrastructure development and rehabilitation.
The FAO and AFC partnership will bring transformative change and innovation to reinforce the impact on the ground and contribute to achieving the Sustainable Development Goals.