Harare — THE Bankers Association of Zimbabwe has set up a US$200 million loan facility to finance tobacco and cotton growers for the 2009/10 farming season.

This is meant to support the agricultural sector, the backbone of the economy.

The country recently received a US$60 million loan facility from a Tunisian Africa Bank to boost tobacco production

The two cash crops are emerging as the country's major foreign currency earners.

Speaking at a business conference organised by the Ministry of Economic Planning and Investment Promotion in Harare last week, president of the Bankers Association of Zimbabwe, Dr John Mangudya said the loan facility was a clear testimony on how the financial sector was serious in supporting the agricultural industry.

He was speaking on the status of the banking sector in Zimbabwe to some potential local and foreign investors who attended the conference.

Agriculture is the main source of raw materials, which is required in the manufacturing industry.

"The loan facility is meant to make sure that all farmers will increase their production levels and it is the duty of the banking sector to avail loan facilities.

"We are the financial mirror of the economy," he said.

He however urged farmers to deposit their money with banks.

"Farmers should deposit their money with banks. It should be a win-win situation.

"There is no single farmer who is going to grow their crops without accessing funds. The funds are available as a loan facility to tobacco and cotton growers," said Dr Mangudya.

Meanwhile, 65 000ha is expected to be put under tobacco production this year and farmers are expected to start preparations if they are to get high yields at the end of the season.

Cotton is one of the country's strategic crops with its contribution to the country's total earnings in the region of US$150 million annually.

This year's tobacco crop is expected to generate US$100 million.

The conference was run under the theme, "Zimbabwe Redefining the Investment and Business Environment," aimed to shade light on possible areas of investment in the country.