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Sikhulekelani Moyo, Business Reporter

A REVOLVING loan facility has been unveiled to support small-scale farmers under the Smallholder Agriculture Cluster Project (SACP), a joint initiative by the Government in partnership with the International Fund for Agriculture Development (IFAD), and the Opec Fund for International Development (OFID).

The revolving loan facility provides investment support to lead value chain enterprises to enhance capacity and linkages with smallholder producers and key market sectors. The SACP seeks to bridge the gaps in the country’s smallholder value chain, which have been blamed for low productivity and low farmer income.

Through cluster identification and venture capital mobilisation complemented by technical services for the agricultural production groups, Zimbabwe expects to boost its yields and enhance food security.

In a statement yesterday, the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development said the loan facility targets enterprises with growth potential, which can lead to increased participation of market actors, especially the resource-constrained smallholder producers.

“SACP invites individually and collectively owned enterprises to submit an expression of interest to participate in value chain upgrading investments leading to improved enterprises performance and viable linkages with smallholder agriculture producer groups,” reads the statement.

“SACP, which is jointly funded by the Government of Zimbabwe, IFAD, and OFID is structuring a revolving loan facility 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.”

The SACP value chain support operations include as a core element financial support to smallholder producers, community-based micro-enterprises, and lead value chain enterprises in value chains of interest.

The ministry said SACP will use the revolving loan facility as the main instrument for channelling financial support to lead value chain enterprises to address current gaps in the provision of working capital and investment credit to agribusinesses working in specific value chains.

“This request for expression of interest is open to lead value chain enterprises participating in value chains where smallholder farmers and private enterprises are assuming the roles of producer and off-takers of agricultural produce, respectively,” it said.

“Interested lead value chain enterprises should currently be facing challenges in accessing finance from the formal financial markets for upgrading current operations.”

The increased participation of smallholder producers is expected to result in increased crop and livestock production, increased sales volumes, and increased profit margins hence the creation of downstream employment. — @SikhulekelaniM1