Online Reporter
Elita Chikwati
Agriculture News Editor
FINANCIAL institutions have urged farmers to present bankable projects that incorporate climate-proofing when they apply for funding to support agricultural enterprises.
This came out at the recent Agribusiness Public Lecture organised by Zimpapers and its partners.
The public lecture ran under the theme: “Smart Harvest, Resilient Nation: Agriculture as Zimbabwe’s Climate and Economic Shield.”
During his presentation at the event, CBZ Agro-Yield head of credit, Mr Wisdom Mukaro, said farming was a viable project, but if farmers did not plan accordingly, they could end up with challenges or shortfalls.
He said banks were willing to fund farmers, but the major challenge was that producers were failing to convince financial institutions that they had the capacity to repay loans.
He cited cash flows and productivity records as crucial when farmers apply for loans.
“Funding for farmers is available, but producers must move beyond traditional input-based lending and present bankable, resilient projects to secure support.
“While banks have traditionally provided loans in the form of seed, fertiliser and chemicals, that model is no longer sustainable. We want to think beyond that; we want to support projects that bring long-term resilience.
“If we finance using yesterday’s financing models, we will continue to face challenges, but if we finance innovations and resilience, we will continue to build a more productive, food-secure, climate-resilient agriculture sector,” he said.
Mr Mukaro said farmers seeking loans must submit proposals detailing the purpose of the funding and provide financial records showing past performance.
“Financial institutions would want to know how farmers will pay back the money – what will be the sources of your money. When applying for loans, we need to ensure we put all possible revenue streams to access funding,” he said.
He noted that because financial institutions were using depositors’ money, they must be satisfied that borrowers will be able to repay.
He challenged agronomists and extension officers to guide farmers to draft their proposals.
“Cash flows are very critical. I urge farmers to ensure those documents are reviewed or to invest in looking for an expert to assist.
“When drafting cash flows, even your timing should be perfect. Climate-smart agriculture takes a long time for farmers to pay. Farmers cannot pay on a seasonal basis.
“This is why some farmers fail to repay their loans. There will be a mismatch in terms of loan repayment because you would have requested the wrong product,” he said.
“Climate resilience is about protecting productivity and increasing profitability. If given inputs, farmers need to have control over variables to contain costs. Farmers should invest in sustainable irrigation such as solar-driven implements,” he added.
The Agricultural Marketing Authority (AMA) chief executive, Ms Alice Mapfidza, said alternative financing models must also be explored.
“We talk of crowdfunding for other businesses, but we do not talk of crowdfunding for agriculture.
“I am calling all of us to sit and see who is the investor in Zimbabwe because only when we invest in produce that has comparative advantage can people easily be contracted and also see the value of agriculture,” she said.
