Zimbabwe said yesterday it was considering legislation that would compel commercial banks to finance black peasants allocated formerly white-owned farmland in controversial land reforms.

This was because the main foreign controlled banks, including the Absa-owned Commercial Bank of Zimbabwe, had "ganged up" to "sabotage" President Robert Mugabe's controversial agricultural reforms, Agriculture Minister Joseph Made said.

Banks failing to lend a substantial portion of their income to new black farmers would have their licences withdrawn, Made warned.

The newly resettled peasants had largely failed to access loans from commercial banks because they didn't have title over the land on which they were resettled and could not use it as collateral.

The government passed a constitutional amendment last year nationalising all productive farmland and barring legal challenges to any decisions on farmland.

With no security of tenure on the farms, banks are reluctant to extend loans to the new farmers, many of whom also don't have much experience in commercial farming nor assets to provide alternative collateral for any loans.

But in an interview with ZimOnline, Made accused commercial banks of "ganging up" against Mugabe's controversial land reforms.

"We have been talking to the banks for a long time," Made said, "but this diplomacy seems to have failed to work.

"We have come to a point where, as the cabinet, we say, what else do we do to ensure that our farmers are funded?

"Because (banks) have failed to listen, our next move will be to force them to fund black farmers, by legislation or otherwise. This is a matter still under discussion and ways are being mapped out."

Although Zimbabwe is enjoying one of its best ever rainy seasons, there are no crops on the ground. Swathes of allocated land are lying fallow for a number of reasons, chiefly the lack of funding for new farmers and serious seed, fertiliser and fuel shortages.

As far as the Zimbabwe government is concerned, banks are chiefly to blame for the slide in agriculture.

"Lawyers are forced to handle certain cases for free every year," Made said. "Banks can also be forced to adopt a quota system (for black farmers).

"We will tell them that if they are to remain operating in Zimbabwe, then they have to reserve a certain amount specifically to finance black farmers."

A bank executive who declined to be named said forcing banks to lend money without checking client creditworthiness would be yet another "illiterate move by the Zimbabwe government which would confine Zimbabwe back to the Stone Age".

Banks should be allowed to operate purely on business principles, he said.