CBZ channels $6m to smallholder farmers

CBZ channels $6m to smallholder farmers
Published: 24 August 2017
CBZ Bank has provided $6 million to smallholder farmers through two facilities over the past two years.

The bank gave out 9 554 loans valued at $5,2 million to farmers across the country under the Livelihoods and Food Security Programme (LFSP) out of a total commitment of $9 million.

LFSP is designed to improve the food security and nutrition of smallholder farmers and rural communities in Zimbabwe.

It works in eight districts, which were selected based on poverty levels, food insecurity, the prevalence of stunting and the potential for market development.

CBZ became one of the providers of financial services to the rural finance component of LFSP in November 2015.

The other LFSP implementing organisations include the United Kingdom's Department for International Development, Coffey International Development Ltd, Palladium and the Food and Agriculture Organisation.

CBZ also loaned out another $876 000 to 4 393 small holder farmers out of approved facilities worth $1,8 million over the same period.

"There is still room for more clients to apply for the facilities. Globally, as CBZ Bank, we are the largest lender to the agricultural sector in Zimbabwe," CBZ group executive for marketing and corporate affairs, Laura Gwatiringa, told The Financial Gazette.

CBZ acknowledged the difficulties that the farmers face in accessing funds but said it had put in place measures to reduce such challenges.

"The farmers struggle to raise adequate collateral. Rural infrastructure in terms of roads, internet connectivity militates against optimum service delivery. As CBZ Bank, we have used group guarantees and again these have worked very well both ways," she said.

The bank is accepting movable property as collateral and says that the use of group guarantees is being achieved through smallholder farmers working in groups.

"They are paying directly to the bank and or through off takers by signing stop order arrangements. We are pleased that through these arrangements we are experiencing very minimal default rates.

"We have also taken advantage of our one stop shop services to embed other risk management tools such as credit insurance into our loan products. This has enabled us to share the risk of lending to smallholder famers with other players in the financial sector, and ultimately given us more room to increase our participation in this sector," Gwatiringa said.

Financial literacy levels are very low among the farmers and CBZ and its partners in the LFSP have structured some training programmes to assist them.

"There is very high cost per dollar lent due to the geographical spread of clientele. Our wide geographical spread as CBZ Bank, however, has allowed us to give the farmers support on the ground. We have also started to use community-based agents," Gwatiringa said.

The farmers lack credible storage facilities but CBZ believes that this is an opportunity for funders to put up storage structures for them.

CBZ said that the LFSP helps it contribute towards financial inclusion and social development.

Lack of investment in infrastructure and other factors have contributed to millions of smallholder farmers living in poverty and lacking food security in the country.
- fingaz
Tags: CBZ,

Comments

Latest News

Latest Published Reports

Latest jobs