adminBrenda Ziga: Herald Reporter
The Reserve Bank of Zimbabwe has urged all banks to develop collateral substitutes to assist smallholder farmers access loans. Speaking at the Private Sector-Financial Institutions Speed Dating Expo for the Livelihoods and Food Security programme in Harare yesterday, RBZ principal bank examiner Ms Audrey Hove said small-holder farmers need to access funding easily to ensure food security.
“Banks in Zimbabwe are required to develop appropriate collateral substitutes in order to address the challenge of security among small-holder farmers.
“The RBZ has directed banking institutions to ensure that at least 20 percent of their loan portfolio is comprised of loans to agriculture as a way of supporting the agriculture sector,” she said.
She said smallholder farmers had little knowledge of financial services products or services offered by formal financial institutions.
“Farmers will also need continuous support in such trainings as financial literacy, various extension approaches to achieve high productivity and market linkages.
“We recommend that the financial literacy education be adopted as a national agenda as this will provide the small-holder farmers with tools to help them make informed decisions regarding consumption of financial services and management of their personal finances,” she said.
Ms Hove said RBZ was developing a National Financial Literacy Framework to raise awareness of financial services and products among marginalised groups.
“RBZ will conduct countrywide financial literacy programmes in conjunction with other stakeholders. This would be complemented by the establishment of information centres in the 59 districts of the country,” she said.
Speaking at the same occasion, Ms Constance Tsekete, who is in charge of the Food and Agricultural Organisation (FAO) rural finance said the organisation conducted training to add to the existing capacity building framework.
Online Reporter