Zim Agricultural Society partners SMEs

THE Zimbabwe Agricultural Society in partnership with DEAT Capital and the Ministry of Small and Medium Enterprises and Co-operative Development will this month hold an SME Banking and Microfinance Summit.

The 5th edition of the Zimbabwe SME Banking and Microfinance Summit will be held on 28 June at the ZAS Exhibition Park under the theme: “Financing Agriculture MSMEs and Value Chains”.

The summit comes at a time when the country is anticipating a bumper harvest and opportunities for investing in agriculture are increasing due to a rising global population and changing dietary preferences of the growing middle class in emerging markets toward higher value foods.

According to estimates, demand for food will increase by 70 percent by 2050, and at least $80 billion annually in investments will be needed to meet this demand globally, most of which is expected to come from the private sector.

“Zimbabwe continues to lend a much smaller share of loan portfolios to agriculture despite its potential and share of GDP (Gross Domestic Product). This limits investment in agriculture by both farmers and agro-enterprises. It also demonstrates that the barrier to lending is not due to a lack of liquidity in the banking sectors, but rather a lack of willingness to expand lending to agriculture. Even when available, much of the agriculture funding tends to be informal and short-term, precluding longer-term investments. This informal funding only partially covers the financial needs of farmers and small agribusinesses and is usually at a high cost,” said ZAS in a statement.

The society said future needs in agriculture finance include longer-term agricultural financing for longerterm investments such as better storage facilities, food or commodity processing facilities and equipment or mechanisation while climate change poses the biggest risk for agriculture and food security.

“There is a need to invest in agriculture to be able to adapt or to mitigate the effects of climate change.”

The society said farmers were being invited to showcase their activities and project ideas to financiers and investors during the summit.

“The summit is an opportunity to share insights of innovative financing in the MSMEs (Micro Small and Medium Enterprises) and agriculture value chains of Zimbabwe.”

ZAS said some of the topics to be discussed include the role of access to finance in creating agricultural MSMEs entrepreneurial firms, innovative financing for women and youth in agricultural value chain businesses as well as how to provide funding to increase investments in agriculture to raise smallscale agriculture productivity, improve quality of agricultural products, and lead to better postharvest practices, which ultimately will increase smallholders’ incomes and promote rural entrepreneurship for small agribusinesses.