Banks to splurge over US$400m

LIVINGSTONE MARUFU

Local  banks have committed to invest   more than US$400m in the agriculture sector  during the summer cropping season  of 2023/24 in an attempt to  improve  farm productivity  and yields, Business Times can report.

The development was revealed by the Bankers Association of Zimbabwe (BAZ)  CEO, Fanwell Mutogo, who said a huge chunk will be paid out in United States dollars.

The estimated US$413.68m in funding, however, is less than the US$1bn needed for the industry. This is one of the largest funding packages for agriculture since 2018.

“Local banks  have  been supportive of agricultural activities in the country  and are set to invest in excess of US$413m with foreign currency denominated investment standing at  US$398m  and local currency  at ZWL$90bn to increase production,” Mutogo said.

He stated that since some banks have not yet finalized the total investments, the figure is anticipated to rise even further.

Even with a predicted drought brought on by El Nino, banks still view funding the agriculture industry as crucial.

“As you know, there are many irrigation schemes dotted around the country hence banks will extend  loans to  beneficiaries under those schemes as they are guaranteed of  a good harvest despite anticipated dry conditions.  Banks will also extend  loans to those without  irrigation schemes as some have insured their crop against weather vagaries hence repayment is guaranteed,” he said.

Some of the banks funding this season’s agriculture  season  include country’s biggest bank CBZ,  the state-owned AFC Commercial Bank, FBC Holdings, NMBZ Holdings and First Capital Bank (FCB) among many others.

The money should be given to smallholder farmers, who are essential to the expansion of agriculture, according to Edward Dune, vice president of the Zimbabwe National Farmers Union.

“There’s a need for the banks to make loans easily accessible to the small holder farmers as they are behind the national output records due to their toil. They have  not been able to access the funds but given their track record, the small scale growers should be  getting loans this summer cropping season,”Dune  said.

“Also, tobacco growers urgently need that US$60m revolving fund to free themselves from the golden leaf merchant’s heavy hand that has impoverished small scale farmers.”