AFC set to anchor agric growth

LIVINGSTONE MARUFU

The Agricultural Finance Corporation (AFC) is poised to play a central role in Zimbabwe’s agricultural transformation by closing the financing gap that emerged in the post-land reform era, Agriculture Minister Dr Anxious Masuka has said.

He said AFC’s diversified structure, comprising a land and development bank, commercial banking operations, leasing services and insurance units, positions it to become a key financier of land reform beneficiaries alongside other established financial institutions.

“This financing should accelerate in the title deeds era, with the introduction of collateral-based lending,” Dr Masuka said.

“Government is providing facilitative guarantees for AFC and other banks to support mechanisation, irrigation development for A1 and A2 farmers, and the establishment of a crop purchase buffer fund.”

Now operating under the Mutapa Investment Fund, AFC is expected to broaden its services and strengthen its position as the preferred financial institution for farmers.

The corporation currently offers specialised windows for agricultural development finance, commercial banking, tractor leasing and insurance facilities aimed at de-risking agriculture.

“The model has succeeded. AFC alone supported about 40 000 hectares of wheat, maize and sorghum during the 2024/2025 agricultural season. This will unlock a new line of financing for agricultural development,” he said.

In addition, AFC is expected to play a greater role in the distribution of inputs under various Presidential agricultural schemes to improve efficiency and promote inclusive banking for more than three million rural beneficiaries.

The institution has also been designated as the Government’s urban land developer under a policy introduced in 2022.

Dr Masuka said AFC is also expected to spearhead the localisation of tobacco financing in the near future.

“With an initial tranche covering 11 000 hectares, AFC should be able to raise about US$500 million to finance both working capital and infrastructure development, support the localisation of tobacco funding, and establish a crop purchase buffer fund,” he said.

“The dedicated fund will assist Treasury in smoothing cash flows so that farmers are paid timeously, ideally within three days of delivering their crop.”

Dr Masuka noted that innovative agricultural financing models in the post-land reform era had largely relied on non-collateralised value chain financing arrangements.

Under such models, merchants and contractors borrow from banks on behalf of farmers, supplying inputs and agronomic support to drive production in value chains such as tobacco, wheat, soyabean, horticulture and poultry.

He added that the Government’s title deeds programme, deeds of grant issuance, and the removal of endorsements on qualifying Bilateral Investment Promotion and Protection Agreement (BIPPA) and indigenous-owned farms had opened new opportunities to accelerate agricultural financing and transformation.

“Furthermore, the A1-focused productivity booster scheme will unlock additional production potential through the development of 180 000 hectares of irrigation by 2030,” Dr Masuka said.

“The scheme is anchored on access to title deeds linked to automatic credit facilities for the development of one to three hectares of irrigation per farmer.”

Government projects AFC’s balance sheet to grow significantly from US$238m in 2025 to US$617m by 2030.