Zimpapers Logo

Nqobile Bhebhe, Senior Business Reporter

A US$16 million revolving loan facility (RLF) for smallholder farmers aimed at financing value chain upgrading investments leading to improved crop, livestock production and creation of downstream employment has been set up.

The Smallholder Agriculture Cluster Programme (SACP) is under the ministry of Lands, Agriculture, Fisheries, Water and Rural Development.

It targets lead value chain enterprises (LVCEs) in Matabeleland North and Midlands, Mashonaland East, West and Central.

Under the scheme, groups of up to 30 smallholder farmers will receive grants of up to US$25 000 and the application process is underway and expected to end on 27 March.

SACP National Project Co-ordinator, Dr Godfrey Nehanda told Business Chronicle yesterday that requests for expression of interest to participate in Co-Investments in Agricultural Value Chains of interest in partnership with SACP are open.

“We are looking at rolling out grants under the Smallholder Agriculture Cluster Project to individuals and collectively owned enterprises.

“SACP, which is jointly funded by the Government of Zimbabwe, the International Fund for Agricultural Development (IFAD) and the Opec Fund for International Development (OFID), is structuring a Revolving Loan Facility (RLF) aimed at financing value chain upgrading investments targeted at enhancing the capacity of private sector players to build long-term linkages with smallholder producers in line with the Government of Zimbabwe strategy for transforming the smallholder agricultural sector.

“To that end, US$16 million has been set aside for the revolving fund. The initiative also seek to train smallholder farmers on financial literacy, ” said Dr Nehanda.

Interested LVCEs should currently be facing challenges in accessing finance from the formal financial markets for upgrading current operations, he noted.

Modalities for administering the fund such as interest’s rates, consultancy firm and the financial institution to oversee it are being worked out.

SACP will use the revolving loan fund as the main instrument for channelling financing support to VCLEs to address current gaps in the provision of working capital and investment credit to agribusinesses working in specific value chains.

He said the initiative is open to VCLEs participating in value chains where smallholder farmers and private enterprises are assuming the roles of producers and off takers of agricultural produce, respectively.

“The facility targets enterprises with growth potential, which can lead to increased participation of market actors, especially the resource-constrained smallholder producers.

“The increased participation of smallholder producers should result in increased crop and livestock production, increased sales volumes, and increased profit margins, hence creation of downstream employment,” he added.

Dr Nehanda said prospective applicants must be formally registered private sector agribusinesses with a minimum of two years’ operations and must have up to date financial records.

Participants are also expected to submit business proposals through provincial structures.

The Second Republic has made food and nutrition security a top priority and is working towards attaining a US$8,2 billion agriculture industry by 2023, underpinned by the country’s National Development Strategy 1 (NDS1) – the key driver towards the Vision 2030 objective of making Zimbabwe a prosperous and empowered upper-middle income society.