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The status of agricultural financing by commercial banks in Zimbabwe

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dc.contributor.author Chigunhah, Blessing Ropafadzo
dc.contributor.author Svotwa, Ezekia
dc.contributor.author Mabvure, Tendai J.
dc.contributor.author Munyoro, Gerald
dc.contributor.author Chikazhe, Lovemore
dc.date.accessioned 2024-12-04T07:15:11Z
dc.date.available 2024-12-04T07:15:11Z
dc.date.issued 2020
dc.identifier.citation Chigunhah, B. R., Svotwa, E., Mabvure, T. J., Munyoro, G., & Chikazhe, L. (2020). The status of agricultural financing by commercial banks in Zimbabwe. APSTRACT: Applied Studies in Agribusiness and Commerce, 14, 45-56. en_US
dc.identifier.uri DOI: 10.19041/APSTRACT/2020/1-2/6
dc.identifier.uri https://ir.cut.ac.zw:8080/xmlui/handle/123456789/522
dc.description.abstract Agricultural finance is indispensable for enhancing productive capacity in both small-scale and commercial farming. This study sought to establish the current status of agricultural financing by 12 registered and operational commercial banks in Zimbabwe in the year 2019. Questionnaires and interview guides were used to collect data. SPSS and NVivo were used for data analysis. All the commercial banks participated in agricultural financing with an average agricultural loan portfolio of 30%. However, their participation in agricultural lending is yet to reach the pre-land reform maximum of 91.3% attained in 1999. Land tenure and weather risks, as well as lack of collateral among farmers reduced the banks’ appetite for lending to the agricultural sector. The majority of the commercial banks offered value chain finance, invoice finance, overdraft facilities, and term loans to agricultural sector clients that mainly included; suppliers, medium-scale, and large-scale commercial farmers. The study established a mismatch in the demand and supply of loans in the medium to long term tenure range of 1 to more than 3 years. There was low demand for 1-3-year tenure loans according to the commercial banks, and a corresponding deficit in the supply of highly demanded longer-term loans of more than 3 years for capital expenditure (CAPEX). Therefore, government should aim to; stabilize currency; arrest hyperinflation; restore economic stability; address land tenure to ensure the bankability of the 99-year Lease; and create an environment that is conducive for investment in climate and weather resilience infrastructure. Local farmers should also invest in human and physical capital to improve their access to bank credit. en_US
dc.language.iso en en_US
dc.publisher AgEcon Search en_US
dc.subject agricultural financing en_US
dc.subject capital formation en_US
dc.subject collateral en_US
dc.subject risk en_US
dc.subject term loans en_US
dc.title The status of agricultural financing by commercial banks in Zimbabwe en_US
dc.type Article en_US


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