ZADT disburse US$50,7 million to agriculture sector

CEO G. Chinoera addressing crowd

ZADT chief executive officer Godfrey Chinoera said of the US$13,9 million that was disbursed last year alone, 42 709 smallholder farmers linked to value chain actors benefited.

THE Zimbabwe Agricultural Development Trust (ZADT) has disbursed a total of US$50,7 million to 172 agri-businesses through its value chain financing facility known as the Credit for Agricultural Trade and Expansion (CREATE) fund since 2010.

Speaking at the ZADT stakeholders’ briefing last week, Reserve Bank of Zimbabwe director for bank supervision, Norman Mataruka said financial institutions should play a leading role in invigorating and stimulating the growth of the economy with the agriculture sector playing a critical role through the provision of innovative, accessible and affordable product.

“Although only 15,8 percent of total banking sector lending went to the agriculture sector, there was room to upscale the level of support, especially in the context of value chain financing,” said Mataruka.

He said the Fund was expected to improve input supplies and market access for smallholder producers of  agricultural commodities thus contributing to an increase in smallholder farmer  productivity, incomes, employment opportunities and improved livelihoods of poor rural families.

“The Fund is available to smallholder farmers borrowing directly through approved financial institutions as well as indirectly through commercial linkages with any of the eligible value chain actors which include agro-dealers, traders, wholesalers, processors, contracting companies and input manufacturers. The financial institutions currently selected to receive, process and disburse the CREATE Fund include FBC Bank, NMB Bank, Steward Bank, BancABC, Ecobank. MBCA Bank, CABS, CBZ Bank, Inclusive Financial Services and Collarhedge Finance,” he said.

ZADT was established in 2010, and has benefited over 100 000 smallholder famers linked to agri-business value chain actors.

ZADT board chairperson Mbekezeli Mthunzi said the fund has grown from US$3,8 million in 2012 to the current US$37,1 million.

“ZADT received capital contribution to the CREATE Fund from the Danish International Development Agency (“Danida”), the United Kingdom Department for International Development (“DfID”) and the Ford Foundation with initial seed funds coming from The Royal Netherlands Embassy and Australian Aid (AusAid) to pilot the ZADT Agricultural Value Chain Financing model,” said Mthunzi.

Commenting on the Fund, ZADT chief executive officer Godfrey Chinoera said of the US$13,9 million that was disbursed last year alone, 42 709 smallholder farmers linked to value chain actors benefited.

“Of the 1 038 smallholder farmers who directly accessed funds through microfinance institutions, 53 percent were women. However access to finance for women and youth remains a challenge.  Agribusinesses, small to medium enterprises and smallholder farmers that have received soft loans or are benefiting from the facility are provided with technical assistance support, in order to strengthen their capacities,” he said.

Chinoera said of those that accessed loans, there was a direct link to a positive correlation on households’ productive assets, and household incomes for both crop farmers by 19,4 percent and livestock farmers by 5,5 percent. 

Agriculture contributes to 60 percent of the country’s foreign exchange earnings, approximately 15 percent of Gross Domestic Product and 23 percent of employment. It remains a fundamental instrument for sustainable development and poverty reduction.

ZADT is a non-profit oriented organization which was registered in October 2010 in Zimbabwe. It was established by SNV Netherlands Development Organization and Humanistic Institute for Development Cooperation (Hivos) having realized the gap that existed in funding small holder agriculture.

The primary purpose of the Trust is therefore to mobilize and provide funding which will contribute to the recovery and improvement of the smallholder farming sector.

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