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Elton Manguwo-Correspondent
THE Zimbabwe Mercantile Exchange (ZMX) will among other positives, ease woes to accessing capital by smallholder farmers through its commodity warehouse receipting system.
The development comes at a time the Government is bent on transforming small-scale farmers into commercially-oriented farmers.
Addressing members of the financial sector during a commodity financiers breakfast forum recently, ZMX board chairman Mr Dereck Odeteye said ZMX was a market place designed to help bankers and financiers to extend financing solutions and credit facilities to farmers, buyers and processors of commodities through a cost effective, secure, guaranteed trading and settlement protocols.
The hosting of the forum coincided with a time the Government has up scaled engagement with relevant stakeholder to review the current agricultural financing model to increase the role of the private sector in the financing of agriculture sector.
“We strongly believe that ZMX has the potential to change the lives of every Zimbabwean and go beyond our borders by connecting markets abroad to meet your demands as providers of finance and credit facilities to producers of various commodities, off takers and agro processors,” said Mr Odeteye.
In addition, the warehouse receipts are an important and effective tool for creating liquidity and easing access to credit and more importantly, offer additional benefits such as smoothing the supply and prices in the market while improving grower incomes.
The introduction of the ZMX has been designed to create a centralised, efficient and transparent market place for all commodities eligible to trade.
Mr Odeteye highlighted that as a private sector led and public sector supported commodities exchange the ZMX is set to revolutionise the trading of commodities on a platform that impeccably connects stakeholders and participants in the financing of all agriculture activities from pre-planting through in season activities to post harvest and trading.
Furthermore, the ZMX shows the Government’s effort in decentralising the marketing of agricultural produce, which is crucial for farmers in getting maximum value from their farming operations.
Mr Odeteye added: “Through the adoption and use of technology, ZMX has opened up numerous opportunities for various participants including bankers, pension funds and other institutional investors to play a significant role and transformative role in providing timely, secured and patient financing to support the agriculture industry in line with the national Development Strategy (NDS1).”
The Ministry of Lands, Agriculture, Fisheries, Water and Rural Development is encouraging the adoption of business practices in the agricultural sector, therefore the use of the warehouse receipt system can further practices such as capital sourcing using agricultural produce as collateral for bank loans.
The agriculture marketing framework will be reviewed to allow the development of a strong agriculture commodity market anchored on the ZMX as part of the wider agricultural reforms.
Online Reporter