The government has tabled fresh security mechanisms to make the 99-year leases bankable
as it seeks to help resettled farmers get funding from banks, Business
Times can report. The move comes as lenders have been rejecting the leases
as collateral due to tenure uncertainty. The lenders want immovable assets, which most farmers do not have.
Lands, Agriculture, Fisheries, Water and Rural Development minister Anxious Masuka told
Business Times on the sidelines of the official opening of the 2022 tobacco marketing season in the
capital that the government was
engaged in serious negotiations
with local banks to make the 99-
year leases bankable.
“Government has made submissions on the bankability
of the 99-year lease and an announcement shall be made
soon as we move to enhance production and productivity on
farms. As the ministry, we want to transform the 21 000 A2 farmers to become perennially successful
businesswomen and businessmen by 2025,” Masuka said. The ministry, Masuka said,
seeks to transform the 360 000 A1 farmers to become formal and viable small-to-medium
enterprises by 2025. The 99-year leases were first issued in 2006 to resettled farmers
that had benefitted from the fasttrack land reform programme at the turn of the century. But banks argued that the leases could not be used as collateral since the land belonged to the State and could not be sold to recover funds in the event farmers defaulted on loan repayments.
This has resulted in farmers failing to benefit from funding from financial institutions. For years, the government
has been failing to convince local lenders to provide loans to farmers.
_via_ *AgroAlerts*
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