Banks suggest SPV  for land beneficiaries Barclays managing director Mr George Guvamatanga
Mr Guvamatanga

Mr Guvamatanga

Lloyd Gumbo Herald Reporter
Accessing funding for agriculture remains the biggest threat to national food security as it emerged yesterday that banks will not lend to farmers on the basis of the 99-year leases that have no title but instead prefer that Government creates a Special Purpose Vehicle to collect levies from beneficiaries of the land reform.
The SPV would then be used to guarantee access from the banks. Bankers Association of Zimbabwe president Mr George Guvamatanga made the remarks when he appeared before the Parliamentary Portfolio Committee on Lands, Agriculture Mechanisation and Irrigation chaired by Mbire legislator Cde David Butau. “The issue for us which is exactly Government’s position on the matter is how do we make the 99-year leases bankable,” he said. “The main issue has always been around dispossession.

Because that is what as a people and as a nation we have not been able to address. My expectation as a banker is if you bring the 99-year lease or a title deed to me and I lend you money, if you fail to pay, I would want to possess and possession means that I also want the ability to sell in the open market. That is where the problem starts. Because I don’t think that anyone of us can take that position to His Excellency (President Mugabe) with his vision of land reform and say we are now going to be taking land away from the indigenous farmer if they fail to pay.

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“Our suggestion was the creation of a special purpose vehicle either housed at the ministry of Finance (and Economic Planning) or at the ministry of Agriculture, (Mechanisation and Irrigation Development) and collect levies from everyone who has benefited from the land.”
The SPV, Mr Guvamatanga said, would then guarantee loans that farmers apply for. In the event that farmers fail to repay and all other the normal processes are followed and they still fail to pay, banks would then get their money from the SPV. “But the guarantor here is Government either through the ministry of Agriculture or the ministry of Finance. If you are the guarantor and you are now paying the bank then it means you can take the land and then it comes back to the allocation pool so it can be allocated to farmers who are productive and who will be able to service their loans.”

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