The Sunday News
Shepias Dube Business Reporter
THE Zimbabwe Agricultural Development Trust (ZADT) has disbursed more than $34 million since 2012 to strengthen smallholder agriculture and rural economies across the country, an official has said.
In an interview on Friday, ZADT chief executive officer Mr Godfrey Chinoera said 151 agro-linked businesses benefited from the fund.
“From 2012 to end of April 2015 ZADT has disbursed a cumulative total of $34 million from the fund to 151 agricultural value chain players or agri-businesses. These funded businesses were commercially linked to 39 725 smallholder farmers,” said Mr Chinoera.
He said the money was disbursed under the Credit for Agriculture Trade and Expansion (Create) Fund which the trust established in 2010 as a revolving fund for the purposes of supporting smallholder agriculture in Zimbabwe through financing value chain actors or agribusinesses that have a commercial relationship with smallholder farmers.
The fund, Mr Chinoera said, has grown from $3,5million in 2010 to $ 36 million this year.
He said agricultural value chains that had benefited from the funded projects to date include bananas, maize, tea, sugar cane, sesame, horticultural crops, fish, beef, dairy and poultry.
Stock feeds manufacturing and distribution have also benefitted from the fund.
Agribusinesses which have accessed funding include Agro dealers, Traders, Transporters, Processors, Manufacturers, Wholesalers and Contracting Companies.
However, Mr Chinoera said ZADT was concerned with the low uptake of the Create fund in the southern parts of the country and have since embarked on a consultative process with stakeholders with a view to finding out the causes of low uptake in those areas and how uptake could be increased.
“As a result of the consultative process, the ZADT is currently conducting awareness campaigns and capacity building activities to ensure equal access to the fund by all eligible and interested agribusinesses in particular those operating in Matabeleland North, Matabeleland South, Midlands and Masvingo provinces,” said Mr Chinoera.
He said in order to improve uptake, the ZADT has reviewed the engagement criteria for Local Capacity Builders (LCBs) to ensure that each province is covered.
The LCBs work closely with the selected financial institutions and are responsible for business development activities.
They also assist agri-businesses to understand the terms and conditions of the facility and provide guidelines on how to write business proposals for submission to selected financial institutions.
Five banks are disbursing the Create Fund. These are BancABC, Ecobank, FBC Bank Limited, NMB Bank Limited and Steward Bank Limited.
Inclusive Financial Services, a Bulawayo based Microfinance Institution has recently been signed up and is directly financing smallholder farmers working in identified irrigation schemes in Matabeleland North and South Provinces.
Mr Chinoera indicated that his organisation has started a process of products development to increase the array of relevant agricultural financial products and to ensure that the fund caters for the needs of various agricultural value chains.
Key value chains with products being considered include poultry, animal feeds, horticulture, oilseeds and dairy.
In addition, Mr Chinoera said ZADT has seen the need to increase the number of disbursing financial institutions, including partnering micro finance institutions to ensure that there is wide distribution of the funds.
Loans under the Create fund range from $5 000 to $200 000. However, where a large number of smallholder farmers benefit from working with or associating with the applicant, the ZADT may approve loans above $200 000.
Loan Tenure varies according to the type of loan with working capital loans tenure ranging from three months to 12 months.
Capital investment loans goes up to 36 months including consideration for up to one year grace period on the principal amount repayments.
The ZADT gets financial support from the Danish International Development Agency (Danida), the United Kingdom Department for International Development (DfID) and the Ford Foundation for the credit facility.
The Australian Agency for International Development (AusAid) and the Royal Netherlands Embassy provided the seed money.
