Sustainable Financing Options for Agriculture in Zimbabwe

Nicholas Masiyandima, Gibson Chigumira and Alex Bara

No 305816, ZEPARU Research Studies from Zimbabwe Economic Policy Analysis and Research Unit (ZEPARU)

Abstract: This paper seek to investigate the extent to which Zimbabwe’s agriculture sector, has a financing gap and to find ways and strategies that can be adopted by Government, banks and the donor community to close the gap. The paper notes that there indeed exists a financing gap in the country’s agriculture sector, especially after the Fast Track Land Reform Programme due to land ownership challenges that emerged in the country’s land market. Notwithstanding this challenge, basing on experience elsewhere, the paper argues that the country’s agriculture sector is bankable and creditworthy. The paper emphasizes the importance of information, social cohesion and peer loan guaranteeing in successful lending to agriculture. It is, therefore, recommended that institutions such as the Grain Marketing Board, with assistance from Government need to invest in establishing farmer data bases on past farmer loan performance, production performance and indebtedness that banks need in appraising farmers’ loan applications. Banks on the other hand need to adopt collateral substitution lending approaches that have been used by successful agriculture finance institutions in other countries to lend to the sector without collateral security.

Keywords: Agricultural Finance; Financial Economics (search for similar items in EconPapers)
Pages: 33
Date: 2011-03-23
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:zepars:305816

DOI: 10.22004/ag.econ.305816

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