HomeNewsBanking sector failing to fund agriculture - Bankers' Association

Banking sector failing to fund agriculture – Bankers’ Association

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THE Banking sector is facing challenges in providing adequate funds to support agricultural production, a senior bank executive has said.

Report by Tarisai Mandizha

Speaking at the official launch of the Food and Nutrition Security Policy last week, Bankers Association of Zimbabwe vice-president Sam Malaba said the banking sector should be more innovative in efforts to meet the financial requirements of farmers.

Malaba said the total deposits in the banking sector as of Thursday were about $3,8 billion, with as much as 87% being short term transitory deposits.

“The banking sector also faces challenges in providing seasonal funding for our farmers. Our facilities have to a large extent, provided seasonal funding for cropping and livestock programmes due to the predominant short-term tenure of deposits in the banking sector,” said Malaba.

He said a critical success factor for the achievement of food and nutrition security policy in Zimbabwe was the adequate mobilisation of financial resources for agriculture recovery growth.

“We are also aware that the proportion of commercial bank funding to the agriculture sector has significantly declined over the past decade and we, as the banking sector have a critical role to play in the continued recovery of the agriculture sector,” he said.

Malaba said the banking sector was aware that the farming sector requires medium and long-term funding for the capital and infrastructure development as this would assist in funding livestock programmes to rebuild the national herd, for mechanisation, irrigation and dam construction.

Many farmers in the country have been struggling to access loans to finance their production as banks were demanding collateral which they do not have.

Government has been promising to issue 99-year leases to farmers since the land reform programme close to a decade ago.

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