AFC plans to provide credit for small farmers

THE Agricultural Finance Corporation plans to provide a timely credit service to smallholder farmers in their localities, the general manager of the corporation, Cde Taka Mutunhu, has said.

He told a farmers’ meeting in Harare on Friday that a substantial investment in both manpower and physical infrastructure is needed to provide credit facilities to a large number of small farmers in remote areas.

“Accordingly in its five-year plan ended in March 1985, the corporation embarked on a programme of establishing a network of branch and district offices to cover the entire country.

“During this period 23 branch and district offices were established. Nine branch offices are headed by branch managers with delegated authorities to grant loans.

“The task of supplying credit to the small farmers, now numbering 800 000, requires that commercial banks be called upon to augment the efforts of the Government and the state-owned financial institutions.”

If commercial banks are to embrace small farmers in the lending activities, it would be necessary for them to re-orientate their lending practices away from laying undue emphasis on collateral security.

They should move to the position where they regard viability and profitability of a credit-supported programme together with integrity of the farmer as a better guarantee than formal collateral.

“To facilitate this development,” Cde Mutunhu said, “the Government and the Reserve Bank should consider the efficacy of providing loan underwriting arrangements in the form of credit guarantees to commercial banks which would have exceeded predetermined levels of lending to small farmers.

“The task of promoting small farmers is an urgent and important one. I believe my serious plans to increase the flow of credit to small farmers required concerted efforts to be mounted by Government, public institutions as well as commercial banks.” ◆ Farming is a business and it requires a lot of financial support for it to be viable and sustainable. ◆ Financial institutions have a huge role to play in financing farmers but their lending mechanisms need to be redesigned to make it viable for the farmers.

◆ To this end Government last year approved the restructuring and remodelling of the Agricultural Bank (Agribank) of Zimbabwe into a Land Bank that will among other issues address the needs of

small farmers.

◆ Government has also proven that with the requisite support such as Command Agriculture and Pfumvudza/Intwasa programmes, the country can achieve massive yields. +263 8677 004323; +263 0242 795771

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