Oliver Kazunga, Senior Business Reporter
LISTED financial services group, ZB Financial Holdings, plans to advance ZWL$300 million to support agriculture in the 2019/20 summer cropping season. The institution’s chief executive officer, Mr Ronald Mutandagayi, revealed this during a briefing with journalists in Bulawayo last Friday.
“We are in discussions at the moment with the Ministry of Finance firstly in terms of crowding-in into the Command Agriculture. Our indications seem to be something in the order of ZWL$150 million that is on crowding-in. But in addition to crowding-in we already have got another ZWL$150 million of customers,” he said.
“Zimbabwe is an agriculture economy and it’s important that agriculture is funded adequately. But as you are aware, Government is running with Command Agriculture and resources there tend to be a little bit cheaper than what you can get from a commercial institution.”
In the 2018/19 summer cropping season, the group availed agriculture funding amounting to US$20 million.
Mr Mutandagayi said ZB Financial Holdings was this summer cropping season prepared to fund agriculture by giving support to every farmer across the country depending on the scale of their operations. These, he said, ranged from large-scale commercial farmers, large-scale agro-processors, medium-sized farmers and small-scale farmers and individual farmers.
“Our strategy at the moment has been to try and ensure that we have got irrigation so that we don’t depend on rain-fed agriculture otherwise if there is drought we might end up in total losses.
“It’s important when you fund a project, and agriculture is no exception, that the people undertaking the project have got the skills to run that project so that your chances of success much higher,” he said.
The ZB Financial Holdings boss said his institution was presently lending working capital, which was predominantly seasonal finance paid after selling the farm produce.
He said they were also looking at providing capital expenditure but such funding requires a longer tenure with farmers generally asking for anything between three and five-year money.
“At the moment we don’t have that kind of money in this economy and normally for capital expenditure people are sinking boreholes, constructing dams, buying things such as centre pivots and all that.
“So, we will fund that provided that we have seen that there is capacity to be able to repay and that’s why when you hear Government talking about credit lines, those are the issues they would like to address,” said Mr Mutandagayi.
“If we get a credit that is a five-year line, seven-year line or 10-year line then we will begin to take care of those needs for longer term funding. But at the moment it’s principally short-term working capital.” — @okazunga