Banks have pledged to continue funding tobacco farmers as the sector has proved to be more lucrative compared to other crops such as maize. Speaking at the National Dialogue on Agro Business, Food Security and Nutrition on Wednesday, Bankers Association of Zimbabwe president Mr Sam Malaba confirmed that there was a shift from funding maize and wheat towards tobacco that was more lucrative. He said the tobacco sector was more organised and had a lower risk as compared to the grains.
“There has been a shift by banks in funding agriculture. Tobacco is well supported and this has resulted in the growing number of tobacco growers every year. What is happening in tobacco contrasts with what is happening with maize, where loan repayments were considerably uncertain. Banks are willing to support tobacco farmers through contractors. The tobacco value chain is efficient and the stop order system has helped banks recover their money,” he said.
Mr Malaba said by funding tobacco farmers through contractors, banks did not have the burden to follow up on individual farmers as the companies had their ways of recovering their costs. He commended Government for the current efforts to raise maize financing through the Agricultural Marketing Authority bills.