Published by the government of Zimbabwe
8 July 2002
The Agricultural Bank of Zimbabwe Limited (Agribank) has turned down an $80 million loan application from a recently launched input procurement company, Mabvazuva Investments.
Agribank is also said to have turned down another $30 million loan from co-operative farmers in Mutare.
The farmers said they wanted to use the money in their preparations for the coming season.
An official with Agribank said the bank turned down the loan application by Mabvazuva Investments because the applicants had 'failed to meet the requirements'.
The applicants were told to apply for the loan as individual groups since the bank was not too sure about the ownership of Mabvazuva Investments.
The official said $80 million was a lot of money and Agribank could not just lend such amounts of money without first ascertaining the validity of the borrowers.
But the ZFU leadership this week criticised Agribank for turning down the loan applications from farmers saying the bank's actions were standing in the way of land reform.
Farmers said this was a slap in the face especially to newly resettled farmers who were in dire need of finance to buy inputs.
Mr Elphanos Mashingaidze, Zimbabwe Farmers Union (ZFU) vice president, said Agribank turned down the loan application from Mabvazuva Investments even though an insurance underwriter, Jupiter Insurance, was prepared to act as guarantor.
The ZFU leadership also slammed Agribank over the recent hike in the bank's interest rates saying this prohibited borrowing on the part of the farmers who were intensifying their land preparations for this season.
Agribank recently increased its interest rates from 35,5 to 39 percent.
The ZFU and the Indigenous Commercial Farmers' Union (ICFU) leadership criticised the increase in the lending rates by Agribank, considered the major financier of the farming sector.
"There is nothing we can do about interest rates, as a commercial bank we had to increase the interest rates and people should understand that Agribank is not subsidised by the Government in any way," said the official.
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