Agribank to restructure into a land bank

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  • The move is expected to promote food security towards the realisation of Vision 2030
  • The Bank will also provide investment support for A1, A2 and small scale commercial farmers who have not been supported by commercial banks
  • Agriculture remains the core of economic recovery and growth in Zimbabwe, accounting for nearly a fifth of output and about a quarter of exports

Harare – State owned agriculture financier, Agribank (Pvt) Limited is set to be restructured into a land bank in a process that is expected to strengthen and diversify existing agricultural and rural financial services for sustainable agranian reform for accelerated development.

Addressing a post-cabinet media briefing in Harare on Tuesday, information minister Senator Monica Mutsvangwa said government has approved the remodelling proposal in the view that, agriculture among other sectors is crucial in realising Vision 2030 owing to its contribution to the economy and to national security.

“Cabinet noted that the establishment of vibrant and diversified rural financial services which are underwritten by a Land Bank or its equivalent will be an important step which the country should take in order to move towards upper middle income status.

“This is in view of the realisation that smallholder farmers comprising Communal, Old Resettlement, Small-Scale Commercial and A1 farmers constitute 99 percent of the farming population, holding up to 95 percent of the productive land and owning over 90 percent of the national livestock herd”, said Senator Mutsvangwa.

Under the proposed model, the Bank will also provide investment support for A1, A2 and small scale commercial farmers who have not been supported by commercial banks.

“It will link currently under-utilised land to structured markets and established value chains supplying factories, supermarkets and export markets and also provide working capital for the construction of agricultural infrastructure as well as for value addition and beneficiation enterprises,” she added.

Currently, smallholder farmers comprising Communal, Old Resettlement, Small-Scale Commercial and A1 farmers constitute 99 percent of the farming population, holding up to 95 percent of the productive land and owning over 90 percent of the national livestock herd.

Agriculture remains the core of economic recovery and growth in Zimbabwe, accounting for nearly a fifth of output and about a quarter of exports.

In full-year 2019, Agribank reported an inflation-adjusted loss of ZW$270 million from a loss of ZW$40 million in 2018 owing to the inflationary pressures in the country.

The Bank made great strides in solidifying its credit assessment processes as well as debt recovery after recording a significant recovery in the NPL ratio from 9% in December 2018 to 3.70% as at end of December 2019.

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