ZIMBABWE – CBZ AGRO-YIELD HAS BURNT ITS FINGERS BY BANKING OF GOZ GUARANTEES

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CBZ rejects govt guarantees

September 29, 2022
RYAN CHIGOCHE

A rise in the number of farmers failing to repay their loans has forced CBZ Agro-Yield to reject loan applications guaranteed by the government, Business Times can report.

CBZ, has been assisting farmers with loans and inputs after the government acted as a guarantor.

However, according to official data from the Ministry of Finance and Economic Development, only ZWL$5bn was recovered out of a possible ZWL$22bn disbursed last year to maize farmers.

Wheat farmers had a better loan repayment rate at 77%, CBZ AgroYield CEO, Walter Chigodora, told a recent pre harvest wheat conference.

Chigodora said the government cannot guarantee those without collateral due to resource constraints.

The government had come with a plan that those with no collateral must get government guarantee so that everyone could go and farm, he said.

“But we now have a problem. The government which is supposed to give the guarantee is sanctioned and its resources are constrained. As a result, the government is not paying the guarantees,” Chigodora said.

He said the company has to work with those who are ready, that is, those with collateral “because if we employ an all inclusive approach it wont work, we are in a crisis”.

“Yes everyone is supposed to benefit but for now we have a challenge because of sanctions the government can’t guarantee. So we are giving to only those with the capacity to repay the loan,” Chigodora said.

He did not disclose how bad his loan book was but reiterated that defaulters will not benefit from the facility till they pay what is due.

Farmers unions have for long argued that it is not possible for farmers to pay back the loans as farming has ceased to be profitable due to the high input costs as farmers now require inputs worth US$1700 per ha.

Late distribution of inputs has also been identified as another reason for farmers to fail paying back the loans.

However, Chigodora said it was better for farmers to reject the late inputs than accept them and refuse to pay back for the inputs when the time comes on that basis.

“Dont take my inputs and then say I was late. That’s a culture we must correct. You go to the warehouse of the farmer. The inputs are not in the warehouse but he said I have not planted because you gave me late so why did you accept them if I was late,’’ Chigodora said.

The executive pleaded with the farmers to have a loan repayment for everything to balance since the initiative is a revolving fund as repayments guarantees timeous distributions of inputs.

Meanwhile distribution for the inputs for the CBZ Agro-Yield wheat summer cropping season are expected to commence next week.

CBZ Agro-Yield is expecting to contract 80 000ha this coming season to all those who have cleared.