Zambia Launches Innovative Agricultural Credit Window to Empower Farmers
The Zambian government, in collaboration with Absa Bank Zambia PLC, has officially operationalized the Memorandum of Understanding (MoU) to provide agricultural loans through the Sustainable Agriculture Financing Facility.
This initiative is set to uplift small and medium-scale farmers, revolutionizing the agricultural landscape.
The credit window, initiated by the government, aims to provide affordable agricultural loans to empower farmers and enhance agricultural production throughout Zambia.
The partnership, kicking off in the 2023/2024 farming season, will particularly benefit small and medium-scale farmers, including both salaried employees and those cultivating more than five hectares of land.
Under this groundbreaking scheme, farmers will receive loans ranging from K13,000 to K70,000 in the form of farming inputs through the local agro-dealer network.
Notably, this process will be entirely electronic, eliminating the need for any cash transactions. The initiative also covers costs associated with land preparation.
The credit window will be administered by private sector financial institutions, including Absa Bank Zambia Plc, ZANACO Plc, Atlas Mara Bank, Indo-Zambia Bank, and NATSAVE Bank.
Loans, carrying a 12% interest rate, will be repaid in cash after harvest, ensuring a fair and convenient process for farmers. Beneficiaries are required to sign agreements to sell their produce to the Food Reserve Agency, contributing to national food security.
This groundbreaking initiative offers more than just financial support. It includes crop insurance, financial literacy training, agricultural mechanization, and value chain investments by small and medium enterprises.
The strategic partnership between the government and financial institutions is poised to be a game-changer, supporting farmers and strengthening the foundation of Zambia’s agricultural sector. Together, they cultivate success and sow the seeds for a thriving future.
