Financial inclusion for tobacco farmers

The tobacco selling season opened yesterday 30 March, 2016 for the auction sales floors and will open today, 31 March, 2016 for the contract floors, the reason being that average prices for a grade of tobacco at the auction floors will determine the lowest price for the same grade at the contract floors, something aimed at protecting contracted farmers.Unlike in previous seasons where tobacco farmers were paid with cheques which they encashed at the banks, this season all farmers are required to open bank accounts with banks of their choice to facilitate payments as all proceeds from the sale of tobacco will be paid into bank accounts.

The Reserve Bank of Zimbabwe engaged banks who are in turn going to offer accounts to tobacco growers at favourable conditions which include wavering of charges for maintaining bank accounts.

As part of Know Your Customer (KYC) requirements, banks will only require tobacco farmers to furnish them with their national identity documents and tobacco growers’ number in order to open a bank account, instead of the usual array of requirements which included passport size photos, proof of residence in terms of utility bills among other requirements.

Banks set up at the different floors prior to the start of the marketing season and were opening accounts instantly for farmers and availing Automated Teller Machines (ATMs) cards, as the farmers were delivering their tobacco, something which will continue into the season.

The Tobacco Industry and Marketing Board welcomed this development which will see farmers accessing cash through ATMs, thereby protecting them from thieves who could follow them from floors with an assurance that they were carrying cash on them.

Unscrupulous dealers and traders who have in the previous seasons flooded the floors and given excited farmers raw deals registered their disgruntlement as this development has made it more difficult to fleece tobacco farmers of their earnings.

The use of the banking system will ease pressure on the farmers and allow them to plan appropriately with no cash in hand.

Farmers will similarly enjoy the convenience of transacting through other payment platforms such as mobile banking and points of sale (POS).

The use of the banking system by the farmers will also go far in creating a track record which will in the future become handy when farmers approach banks seeking financial assistance for the production of tobacco.

The Reserve Bank of Zimbabwe allayed fears that they is a possibility that banks may fail to meet the liquidity needs of the farmers.

This financial inclusion initiative aims at improving growers’ quality of life, improving farmers’ access to financial services as well as improving farm productivity in terms of increased average revenue for the grower as well as yield per hectare.

While this initiative benefits farmers, financial inclusion also benefits the economy of Zimbabwe as it is in line with the government’s ten point plan objectives of unlocking the potential of Small to Medium Enterprises as well as that of restoring and building of confidence and stability in the financial services sector.

Availing formal banking services to farmers and including them in the financial system will present farmers with an opportunity to save, will increase the number of Zimbabweans using the banking system and will also go far in the development of agriculture in Zimbabwe as credit facilities will be extended to the industry in the future.

Farmers are urged to open bank accounts with banks of their choice at the auction floors.

 

For any additional information please contact TIMB on telephone numbers 0772145166 /9 or 0279-22082 /21982 or 025-3439 or 067-24268 /29246 or 0277-2700 or 064-7280 or 0271-6772 or E-mail: [email protected] visit our website on www.timb.co.zw

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