Advise farmers to expand collateral space

The Chronicle

Oliver Kazunga, Senior Business Reporter
FARMERS have been advised to expand the collateral space by surrendering real estate as security when borrowing loans to finance production, while banks still do not accept the 99-year lease agreements.

Despite a recent announcement by the government that farmers with 99-year lease contracts now have access to loans from banks to finance agriculture, during a plenary discussion at the newly contracted confederation of Zimbabwe Industries (CZI) an annual congress and international investment forum in Bulawayo revealed that the 99-year lease contracts were still inadmissible.

The industrialist, Mr. Calisto Jokonya, accused the farmers in Zimbabwe of not taking farms seriously because they could use their houses as collateral to gain access to bank finance.

"I think we do not shy away from ourselves as business people to think about ways and means to get out of our challenges." If you were the banker who borrowed money, given the country situation in Zimbabwe, you would not be very brilliant to disagree.

"All these farmers we're talking about in Zimbabwe have homes in the country and yet they do not want to mortage them because they're not serious about farming," he said.

"I think there are many ways in which they should look at it when farmers are serious about taking this business very seriously." At one meeting we attended, we were told 99-year lease contracts were now accepted and I was shocked when Hammond (CABS director) remarked that there should still be & # 39; panelbeating & # 39 ;. "

The banking association of Zimbabwe has said that financial institutions are committed to supporting the agricultural sector, but would only help people with viable agricultural projects and valuable infrastructure. Those who are eligible for the loans include farmers who have houses, barns and mountain huts. Business addresses are considered proof of residence when opening an account.

An official from the Industrial Development Corporation (IDC) of South Africa, Mr. Thokoane Tsolo, added his voice and said he felt that collateral space should be expanded to cover real estate for farmers to finance their operations.

"For my part, I do not see why the collateral is not extended to real estate, because at the end of the day if you do not pay your debt, the collateral that was submitted to the bank in obtaining a loan is forfeited, " he said.

The former president of CZI, Mr. Kumbirai Katsande, said that it was not about the possession of land, but about access to the land.

"We seem to be stuck with this property issue, and yet others are now working to securitise the leases to unlock value on the market," he said.

The agricultural sector is one of the economic pillars of Zimbabwe and over the last few years has provided more than 60 percent of the input needed by manufacturers, while consuming around 40 percent of industrial production.

The sector accounts for more than 16 percent of the gross domestic product (GDP) of Zimbabwe and is the biggest biggest contributor. – @okazunga

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