President to launch new AFC Commercial Bank

by | Apr 29, 2021 | Business, Local News | 0 comments

Hosia Mviringi

President Emmerson Mnangagwa will tomorrow launch the AFC Commercial Bank which comes on the ashes of the old agricultural financier, Agribank.

Agribank has gone through extensive restructuring which has seen the bank being reconstituted and unbundled into AFC Land Bank, AFC Insurance and AFC Leasing Company in an endeavor to accommodate previously disadvantaged small and communal farmers.

Success of agriculture in any country is dependant on availability and accessibility of affordable and sustainable funding.

Post land-reform Agriculture in Zimbabwe, has struggled largely due to poor funding mechanisms which favoured only large scale farmers at the expense of communal farmers.

Where commercial farmers had access to favourable loan terms, small scale farmers have always struggled to produce for the market due to lack of adequate affordable finance and extension services.

Communal farmers have historically been the biggest producers of the staple maize, while commercial farmers focused on cash crops.
Government approved the proposal for the restructuring late last year in October and the process has been ongoing.

It was agreed that Agricultural productivity lies at the core of government efforts to achieve its goals under National Development Strategy 1 blueprint which runs from 2021 to 2025.

In an interview then last year, Minister of Lands, Fisheries, Water and Rural Resettlement, Dr Anxious Masuka said that the restructured bank was set to offer farmers comprehensive services such as mobilisation of finds from the private sector for on lending to farmers at affordable rates.

“That’s why we have reconfigured it to say it is not the responsibility of the Ministry to ensure farmers are taken from one point to the other towards this journey of achieving an upper-middle-income economy by 2030.
But the whole government approach requires that Agribank, as a financier, be there to offer comprehensive services to the farmers,” he said.

The move to remodel the bank is in line with the government’s Agriculture Recovery Plan, which aims to ensure food self-sufficiency, import substitution and ultimately save the country foreign currency which can then be redirected to other critical sectors of the economy.

The new refocused AFC Commercial Bank is set to revolutionise Agricultural Financing in the country as it is going to improve farmers’ access to affordable finance.

Access to cheap finance which is underwritten by a strong Land Bank has been the missing link in improving agricultural productivity.

Household food security, reduction in poverty and eradication of severe hunger and malnutrition are critical factors for attainment of some of the most critical United Nations Sustainable Development Goals (SDG’s).

Sustainable funding for farmers will help many subsistence farmers to graduate into a business model of farming or commercial farming.
Small scale farmers can produce more if affordable funding and appropriate extension services are availed.

Appropriate funding will help farmers acquire relevant technology and inputs to improve yield per hectare.

This has been proven by this year’s highly successful Conservation farming (Pfumvudza/Intwasa) and the Presidential Input Support Scheme contributed to this year’s anticipated bumper harvest.