adminagri-businesses dealing with communal farmers, is emerging as an affordable source of agricultural capitalisation ahead of this year’s growing season.
The AgriTrade credit facility, which started in May this year, is run through three financial institutions CABS, Trust Bank and MicroKing Finance.
AgriTrade loans range from US$1 000 to US$200 000.
The facility has so far disbursed US$3,5 million to 499 farmers and agro-dealers across the country.
A Chegutu beneficiary, Mr Clapos Hove, who is into grain trading, received US$11 000 loan through the AgriTrade facility in July this year and managed to buy 70 tonnes of maize from 100 communal farmers in Mashonaland West. Mr Hove said the loan has made it possible for him to buy maize in large volumes, making his business both viable and profitable.
Most local banks have short-term loans with high interest rates making it unviable for business people to borrow from the banks.
“The trick with maize lies in volumes. Without high volumes, the low profit margins can make your business sink,” he said.
Maize generally sells from US$2,50 – US$4,00 a bucket (about 17kg).
Mr Hove buys maize from smallholder farmers in Zvimba, Msengezi, Zowa and Runakasi and sells to companies such as ProGroup, Colcom, Irvines, Delta and Staywell.
“The interest rate is quite affordable, thus increasing viability of my business.”
Another borrower, Mr Simbarashe Mupanduki of Lower Gweru, who borrowed US$2 500 from the AgriTrade credit facility in October, said he used to have financial constraints and this was affecting operations at his butchery.
“With this loan I am going to be able to buy some cattle and boost my butchery business.”
Mupanduki buys cattle from communal farmers in Lower Gweru ranging from US$300 to US$500.
The absence of affordable loans from banks has resulted in many people failing to secure funds to run their businesses.
Most local banks have short-term loans with high interest rates making it unviable for business people to borrow from the banks.
Online Reporter