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accept the 99-year leases as collateral.
Banks and other financial institutions argue that the land is not transferable in the event that farmers default.
However, banks have agreed in principle to accept the improved leases once approved by Cabinet.
This also comes at a time when Finance Minister Tendai Biti has said Government has no capacity to support agriculture in full.
He is on record as saying there is need for Government to make the long leases bankable to enable farmers to use them as collateral.
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“Everything is very much on course and all things being equal, farmers should start using the facility this season once its approved by Cabinet.
“The proposals came from banks themselves so all is in order because we are working with their proposals,” Minister Murerwa said.
Bankers Association of Zimbabwe president Mr John Mushayavanhu said they were still to hear from Government on their suggestions on improving the leases.
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BAZ former president Dr John Mangundya wrote to Government saying bankers were pleased with the redrafted agricultural land settlement lease.
He said most of the constraints, which had made the lease unattractive to beneficiaries had been addressed in the new document to the satisfaction of bankers.
Some of the improved provisions, Dr Mangundya said, were “Clause 2- conditions under which corporate bodies may benefit, Clause 3 – effect of endorsements against cancelled title deeds, Clause 11 – relaxation on stringent conditions on how to use the land including sale of cattle to the state and forced farming of cereals.
“Clause 18 – rights of spouses and dispute resolution clarified, inheritance issues have also been dealt with.
“Clause 26 – clearly states that the lessee may use the lease as collateral in securing agricultural financial assistance from any financial or agricultural institution. The lease is also registerable in a deeds registry,” he said.
BAZ, however, said there were still other grey areas that needed to be addressed in circumstances where farmers fail to repay the loans.
Dr Mangundya said conditions where the lessee (farmer) cannot cede, assign, hypothecate or enter into a working partnership without the authority of the lessor (Government) made it difficult for debt recovery.
Banks, Dr Mangundya added, were not happy with Government retaining broad powers to repossess the land in the interest of public safety and public order. He said there was no provision guaranteeing the interests of a moneylender on the event of cancellation of the lease since Government has the power to cancel the lease on account of breach.
Online Reporter