LIVINGSTONE MARUFU
Local banks have told Parliament the financial sector will not lend to farmers using the 99-year leases as collateral as the land tenure in Zimbabwe is not guaranteed, it emerged this week.
As was first reported by Business Times last week, the lenders met with legislators to discuss the proposed 99-year leases’ security mechanisms to make it bankable.
However, the lenders were worried of continued farm invasions across the country, a strong indication that the land can be taken away from existing farmers who are potential borrowers.
Multiple legislators and bankers, who attended the meeting in Parliament, told Business Times that the lenders were adamant that as long as the government does not bring finality to the land reform programme, they will not accept the 99-year lease as collateral.
“There should be land tenure security for farmers. This gives a guarantee to the lender. But with our land, there is neither tenure nor security. One day you have a good farmer and next day you hear that the farmer is no longer on the land,” a legislator, who preferred anonymity, told Business Times.
The legislator said there were farm invasions still taking place around the country and this removes security on the part of the land as it may be taken away at any given time.
“Even the land protected under the Bilateral Investment Protection and Promotion Agreements was invaded and is yet to be returned,” added the legislator.
Bankers said if land tenure was well defined in that document, this will help in making the paper bankable.
“If land tenure is guaranteed, there will be improvements on farms and we will have structures like workshops, garages, warehouses, storerooms and houses and that way banks can give loans according to these developments,” reads part of the document tabled by bankers in Parliament and seen by Business Times.
Contacted for comment, Bankers Association of Zimbabwe CEO, Fanwell Mutogo, was not at liberty to share the bankers’ submissions to Parliament.
He referred all questions to BAZ president Mehluli Mpofu.
Mpofu could not be reached for comment as his mobile number went unanswered.
Section 72 of the Constitution says all land belongs to the State, meaning the banks would be powerless to sell the land in the event of a default.
This has resulted in farmers struggling to access funds from banks who continue to shun 99-year leases as not bankable, thereby affecting production on the farms.
