KELLY NJOMBO, Lusaka
THE Indaba Agricultural Policy and Research Institute (IAPRI) says Zambia needs accessible financial resources among smallholder farmers at all levels of the agricultural value chain to shift from subsistence-oriented agriculture to commercial.
IAPRI research director Anthony Chapoto said access to finance is critical for agricultural transformation in Zambia and Africa, hence the need to make it accessible among smallholder farmers.
Dr Chapoto said in a presentation on Innovations and Financial Inclusion of Smallholder Farmersâ€ during the second International Banking and Finance Conference, that inadequate access to financial services is a key constraint to economic growth and poverty reduction in the country.
â€œAs a country, we need to shift from subsistence-oriented agriculture to commercial agriculture, but this will require financial resources at all levels of the agricultural value chain. Access to financial services by smallholder farmers remains a major bottleneck to agricultural performance in Zambia,â€ Dr Chapoto said.
He said the country needs innovative financing opportunities for smallholder farmers to take advantage of and to enable them grow their businesses.
Dr Chapoto said financial literacy is an engine that will help to achieve comprehensive financial inclusion thereby providing financial freedom.
He said there is also need to promote access to finance in rural areas and local entrepreneurs as they require a wide range of financial services.
â€œFinancial services provided by non-specialised financial institutions along value chains have limitations as they tend to be expensive, lack flexibility, and are not diverse. Value chain financing is an important mechanism to deliver financial services to rural households and small and medium enterprises.
â€œIncreased investment credit to smallholder farmers and small and medium agro-enterprises is critical in promoting agricultural growth,â€ he said.
Dr Chapoto said extension workers should provide business skills training to smallholder farmers in the country, to stimulate rural entrepreneurship.
KELLY NJOMBO, Lusaka