BANKERS have urged entrepreneurs to explore ways of accessing funding without collateral.
BancABC chief executive officer Lance Mambondiani made the suggestion while representing the Bankers Association of Zimbabwe at the International Business Conference held in Bulawayo last week.
The conference ran alongside the Zimbabwe International Trade Fair, which was officially opened by President Emmerson Mnangagwa last Friday.
Mambondiani said Zimbabwe’s banking sector had not done enough to fund the agricultural sector.
Swathes of prime land taken over by black Zimbabwean farmers at the turn of the century have remained idle, mostly because of capital constraints, as banks remain cautious about funding the sector due to lack of collateral.
The result has been food and foreign currency shortages as the country has failed to unlock the potential that lies in the sector. Agriculture is one of the biggest sectors driving Zimbabwe’s economy through foreign currency generating crops such as tobacco and cotton.
Government says the agricultural sector is among four key industries that will help rebuild the economy. The others are mining, tourism and manufacturing.
“It just requires us to think a little bit differently from the normal banking approach, approaching a bank to say ‘I need a loan and the bank says to you’, ‘you do not have a house so, I cannot not fund you. Cattle are collateral, land is collateral, if you have that facility why would you not find a financing model to collateralise what we have,’’ Mambondiani told the conference.
He said BancABC had, for example, started funding sugarcane farmers in Chiredzi.
Mambondiani said there were several value chain areas that bankers could look at and come up with public-private partnership so as to develop the economy.
Industrial Development Corporation (IDC) chairperson Winston Makamure said the firm had placed rural industrialisation, among its key priority areas.
He said the IDC was also investing into limestone production.
Last year, IDC ventured into passenger coaches and truck production, Makamure said.
“Six buses are already on the road. We have received 200 kits and we have started re-assembling buses. We have partnered the higher institutes of learning and innovation hubs to say let’s commercialise those patterns. We are seeing young people who are coming to say what is the bill, what is it that we can substitute that we are using foreign currency on?” he added.