Zimbabwe News and Internet Radio

Farmers welcome bankable 99-year leases

By Elita Chikwati and Mellisa Mutasa

Farmers have welcomed the move by bankers to accept 99-year leases as collateral saying this will ease funding challenges and ensure increased productivity. Farmers have been experiencing challenges accessing funding from banks as most of them did not have the required collateral.The farmers urged banks to come up with viable interest rates.

Paul Zakariya
Paul Zakariya

Zimbabwe Farmers Union president, Mr Paul Zakariya said the new development was in the interest of farmers.

“It is in the interests of the farmers that the 99-year lease becomes bankable. This will unlock the value of land, create opportunities to secure funding as well as encourage organised farming. In order to deal with the issues of transferability, an open land administration system must be put in place. The system should be transparent and self-regulatory, providing guidance on how land, in the case of loan defaults can be handled without pausing unnecessary risk to financial institutions,” he said.

Mr Zakariya said farmers had been eagerly waiting for this opportunity.

“Farmers are eagerly waiting for this development. It has been in the offing for far too long. We want to believe that now the concerns of the banks have been answered and farmers can begin to lock in on investments using their 99-year leases,” he said

Commercial Farmers Union director, Mr Ben Gilpin yesterday said they were waiting to see how banks would react.“If the system is truly tradable and simple we will see an improvement. For many farmers and the banking sector we are certain the option of full title would be attractive.

“In the past banks used the security of titled property lodged with them as the basis for getting lines of credit to on lend to farmers. This capacity has been lost. This had affected not only former large scale commercial farmers but also farmers such as those from the small scale commercial areas or purchase areas,” he said.

Mr Gilpin said the tradable 99-year lease would enable farmers to borrow and sell from different sources.

“The big question is to what extent is Government prepared to allow the market to decide who had access to land,” he said.

Agriculture economist, Mr Midway Bhunu said this was a noble development in the agriculture sector that would restore confidence in the financial institutions to fund agriculture.

“It is a noble development that has been on the table for long. I want to recommend that dialogue or roundtable discussions will be done with all the key players like Bankers Association of Zimbabwe, farmers unions, Ministry of Lands, Agriculture and Rural Resettlement to hammer on the transferability issue so that it becomes clear on how this whole arrangement will be managed.

“Banks are not interested in land. Their business is lending money to people. The other critical thing is policy consistency. Farmers and banks should have confidence in the policy system so that they make informed economic decisions,” he said.

Zimbabwe Commercial Farmers Union president Mr Wonder Chabikwa said the development came as good news to farmers.

“This development came as good news to farmers. We are glad that farmers are to benefit from this development because lately banks only required houses in towns with title deeds leaving out farmers who stayed at farms.

“Farmers had been clamouring and lobbying for this opportunity for a long time.

“We hope farmers will get an opportunity to develop on long term machinery and irrigation systems. We would appreciate if farmers were offered affordable single digit interest rates of at least about four percent or below,” said Mr Chabikwa. The Chronicle