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Elita Chikwati Agriculture Reporter
Farmers have started accessing funding from banks in preparation for the 2013/14 farming season despite the unchanged conditions for borrowing, Bankers Association of Zimbabwe chief executive Mr Sij Biyam has confirmed.Banks have set aside US$720 million to finance the coming agricultural season with individual farmers and suppliers free to access the funds.

The funds would be distributed through supporting agro-dealers, merchants who contract farmers and farmers directly through loan facilities from individual banks.

Mr Biyam said some farmers had already received loans while others were still having their requests for funding processed. He, however, could not give the number of farmers who have accessed funding for this season as he said the figures differed with banks and kept changing every day.

“Banks are using the normal lending criteria and there is a need for the borrower to have collateral, which differs according to the specific bank,” he said.

He said interest rates on loans also differed with individual banks as they had different sources of money.  Mr Biyam said the issue of the 99-year leases had not been finalised by the Lands and Resettlement Ministry and therefore the document could not be used as collateral this season.

“Few farmers have 99-year leases. The majority have offer letters and these documents cannot be used as security. We have made suggestions to the responsible ministry to work on the document so that it becomes bankable,” he said.

He urged farmers to invest and bank their money when they get paid so banks could get funds to operate.
“Most farmers go to buy cars and furniture straight after getting their money at the auction floors. Few farmers bank their money and the banks will not have enough money to lend the farmers,” he said.

The major challenge that was affecting banks in funding farmers, Mr Biyam said, was the failure by farmers to pay back loans.
He said most farmers did not pay back loans and this was negatively affecting operations of most banks.

Mr Biyam complained over the current system where farmers processed and accessed loans as this affected production.
“Long back we used to ask farmers to hand in their returns so that we know what the farmer has produced, how much money he is able to pay back to the bank and how much money he needed for the next season by June and this helped us plan adequately,” he said.

He said by now farmers should have accessed loans and be buying inputs early, instead of starting to apply for loans now.
Zimbabwe Commercial Farmers Union vice president Mr Johnson Mapira urged farmers to be trustworthy and pay back loans.

“Farmers should develop a relationship with banks. They should bank their money and have a mutual relationship. This will make it easy for the farmer to access loans from the banks,” he said.

Mr Mapira said farmers should quickly apply for the loans and procure inputs early to avoid late planting. He urged the banking sector to consider livestock, tillage equipment such as tractors and other farm assets as collateral to enable more farmers to access loans from banks.

Zimbabwe Indigenous Women Farmers Association Trust president Mrs Depinah Nkomo urged banks to prioritise funding food crops to ensure national food security.

“More funds should be channelled towards maize and small grains production so that we do not continue to import food,” she said.