SMALL-SCALE farmers in rural areas have bemoaned lack of financial access and credit facilities in Zimbabwe due to lack of collateral security among other pressing challenges, Southern Eye Business has established. MTHANDAZO NYONI OWN CORRESPONDENT
Rejoice Moyo, the Merblue Investment director, and Women and Youth in Poultry secretary, said about 70% of the population of resides in the communal areas, but less than 15% of Zimbabwean financial institutions are found in remote rural areas.
“Financing is thus informal or the rural folks have to travel long distances to the nearest urban centres to access financial services. Small-scale farmers cannot access credit mainly due to lack of collateral security,” she said.
“Uncertainty and risk factors were increased by non-bankable offer letters. No financial market could plan to lend in such unstable environments. So there are simply no funds for the smallholder farmers”
Moyo said development and microfinance institutions shun locating in rural areas as they are afraid of default risk.
