No inputs for loan defaulters
RYAN CHIGOCHE
A unit of Zimbabwe’s biggest banking group, CBZ Holdings, says it will not provide inputs and financial assistance to farmers who failed to repay loans provided in the last cropping season as it tightens screws on defaulters.
CBZ Agro Yield CEO, Walter Chigodora, said defaulters have resulted in the institution failing to distribute inputs on time ahead of the winter cropping season.
The firm runs a revolving fund.
“We have got a low loan repayment culture which is not good for our country. CBZ Agro Yield is a revolving fund which means that if the other party does not play ball it will be difficult,” Chigodora said, adding that farmers would be able to access the inputs by mid-month. CBZ Agro Yields will also be providing working capital.
He added: “But, only those who have paid their previous loans will be able to benefit from the CBZ Agro Yield facility. This time around we will be working towards educating the farmer on good agronomic practices and that includes instilling a loan repayment culture.”
Banks have in the past struggled to contain the non-performing loans which at one time reached 20.4% meaning that 20 cents for every dollar borrowed was not repaid.
The high NPL ratio forced the government to create the Zimbabwe Asset Management Company to take over the loans from the balance sheets of banks so that they would lend again.
Acting as the guarantor the government handed over agriculture financing to banks, taking a significant risk by the provision of guarantees for the borrowing farmers.
According to the Treasury data, of the ZWL$22bn disbursed to maize farmers last year, only ZWL$5bn has been recovered, representing a 22% recovery rate.
Soyabean farmers got ZW$1.5bn but only repaid ZW$199m, a recovery rate of about 13%. However, loans extended to tobacco and wheat farmers were performing well as loans amounting to ZWL$1.6bn, had a higher recovery rate of 77%.
The Zimbabwe Commercial Farmers Union president, Shadreck Makombe, said farmers have to plant timeously with all the required input in place to be able to realise good yields. “CBZ should be applauded because by doing that they will be heeding the farmers’ call because we expect farmers to begin planting as early as April 1. 2022,” Makombe said.
“Given the changing climatic conditions we are encouraging farmers to plant this period to realise better yields.
“The earlier the farmers do it the better especially with these unpredictable rainfall patterns. We would want farmers to finish planting by May so that the grain is not affected by rainfall and end up being used as stock feed.
For the past three years, CBZ Agro Yield, has been empowering farmers. It distributes the seed, fertiliser, chemicals, fuel mechanisation and also working capital. In the previous winter seasons CBZ Agro Yield funded over 40% of the total wheat delivered.
