Bankers ready for 99-year farm leases

31 Aug, 2018 - 00:08 0 Views
Bankers ready for 99-year farm leases Dr Mangudya

eBusiness Weekly

Africa Moyo
The Bankers Association of Zimbabwe (BAZ) says it is ready to extend loans to farmers with 99-year leases as part of efforts to minimise the exportation of foreign currency as industry searches for agro-raw materials.

This comes as farmers have been complaining that they can’t access funds from banks despite reports that financial institutions and Government hammered an agreement on the bankability of 99-year leases.

Interestingly, President Mnangagwa this week pleaded with bankers to support the agricultural sector with affordable loans to ensure the growth of the sector.

BAZ president Webster Rusere, told a Marketers Association of Zimbabwe (MAZ) and Zimbabwe Agricultural Society (ZAS) breakfast meeting this week that bankers are now ready to lend on the basis of 99-year leases to substitute imports.

“On 99-year leases, we are saying bring your 99-year leases and we can support you particularly on soya bean growing,” said Rusere.

“The amount of foreign currency we use to import cooking oil is too much. Furniture imports are also alarming.”

Rusere said the banking sector has $8,2 billion in deposits and $6,7 billion has been issued as loans to various companies. Commercial loans took close to $3 billion of the $6,7 billion loans extended by banks.

Rusere said given the abuse of cash by citizens, importation of cash is not sustainable, hence the need for transactions to be digital, while banks allocate money to productive industries.

“We still see opportunities where we can catalyse (the) mining (sector). Why do we still import sulphuric acid when we have Zimphos? As the banking sector, we are ready to partner or support the production of sulphuric acid locally.”

 Soya Bean Production
Rusere said farmers should bring their 99-year leases to get financial support. Bankers are keen to finance the growing of soya bean so as to reduce the quantum of foreign currency used to import crude oil used in the manufacture of cooking oil.

Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya, has indicated that about $300 million is gobbled annually through the importation of crude oil to capacitate local oil expressers.

Oil expressers have indicated that they plan to increase soya beans hectarage to 120 000 in the next four years to cut foreign currency demand.

The country requires about 300 000 tonnes of soya beans while oil expressers alone need 150 000 tonnes of soya beans per year to meet their needs.

Soya bean imports chewed $172 million from fiscus last year after farmers produced a measly 30 000 tonnes.

Banks Open for Business
Rusere said bankers are keen to lend to farmers. He called on them to submit bankable proposals.

“We are open for business. We want companies to start producing locally. However, the products should be of top quality, producers should not cut corners.

“In the construction sector, why do we have to bring people from outside? Let’s do it locally. Let’s come up with actionable points,” said Rusere.

President Mnangagwa said if the country was to grow its agricultural sector, then the banking sector should play an active role through financing farmers.

The President said this on Wednesday during the 6th Annual National Agribusiness Conference held concurrently with the Harare Agricultural Show.

Need for affordable finance
Said President Mnangagwa: “In our quest to grow the agriculture sector, affordable credit finance remains a major challenge as access and cost of finance are not favourable to most farmers.

“May I humbly request you (bankers) to come on board. What (do) I mean; may you make your financial service sector accessible and favourable to the current environment to make our economy grow, not introduce policies and practices that stifle that growth as a result of a desire to make maximum profits.

“I therefore call upon financiers to redesign their financing models with a view to make their packages accessible and affordable to our people in all subsectors of our economy.”

President Mnangagwa said there is a lot of money sitting in banks but domestic investors find it difficult to access it due to the high level of interest levied.

The high cost of money, which goes up to 25 percent despite an RBZ cap on loan interests of 12 percent, has adversely impacted on the operations of some companies.

President Mnangagwa said he is not seeking to cause banks to make losses, but “reasonable profit”.

He also encouraged beneficiaries of agro-finance schemes to honour their repayment obligations, adding that the prevalence of non-performing loans “must be a thing of the past in the Second Republic”.

“Let us, as farmers and stakeholders in the economy, embrace a culture of honesty, high ethical and honourable conduct, as we strive to uphold the Zimbabwe we all want.

“I exhort farmers across the country to treat farming as a business which should be viable.”

Share This:

Sponsored Links

Survey


We value your opinion! Take a moment to complete our survey

This will close in 20 seconds