HomeLocal NewsBanks reject 99-year leases

Banks reject 99-year leases

DESPITE government assurances to beneficiaries of Zimbabwe’s controversial fast-track land reform programme, local banks continue to reject 99-year leases as collateral, the Zimbabwe Independent has learnt.

Herbert Moyo

Finance minister Patrick Chinamasa last week on Tuesday announced government and bankers had come up with a draft tradable document which will pave the way for farmers to access bank loans using their 99-year leases as collateral.

“We have successfully, in consultation with the Ministry of Finance, Ministry of Lands, Ministry of Agriculture and the Bankers Association of Zimbabwe, come up with a draft that incorporates tradable features. This means that when one is granted the 99-year lease they can use it as a document to go and borrow money,” Chinamasa announced, while addressing students at the 29th Joint Staff College course in Harare last Tuesday.

However, checks carried out this week by this newspaper show that banks are still digging in, with some dismissing Chinamasa’s claims as “media stories which do not inform our policies.”

“We haven’t received any communication to that effect. These are some of the issues we also just read about in the media, but we do not act on the basis of those reports.

We wait for official instructions from the (bank’s) management. So as things stand, our position is that nothing has changed and we are still not giving out loans on the basis of the 99-year leases,” said an official from Agribank’s loans division on Wednesday morning. Officials from other banks, including FBC and ZB, who spoke on condition of anonymity, also said they had not received any official communication from their management regarding the acceptability of the 99- year leases.

Some BAZ officials said Chinamasa had rushed to announce before the conclusion of talks between the government and the bankers.

“There was a meeting to explore the issue last month and it was agreed that there should be another meeting this month. However, we have not had that follow-up, but Chinamasa has already rushed to make an announcement when no agreement has been reached,” said one BAZ source.

BAZ executive director Sijabuliso Biyam did not respond to calls and messages sent to his mobile phone. Government embarked on the land reform programme in 2000 with the aim of redressing colonial imbalances by expropriating 11 million hectares from over 4 500 white commercial farmers for re-distribution to the indigenous African population.

The beneficiaries, who were issued with 99-year leases, have however failed to ensure full productivity as they have they lacked capacity and struggled to access loans from banks. The banks have been insisting they want transferable title as collateral, not 99-year leases

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