Consider reducing reserve ratios, says ZNFU

ZAMBIA National Farmers Union senior economist Humphrey Katontoka says Bank of Zambia (BoZ) should give incentives such as reducing reserve ratios to commercial banks that support the agriculture sector.
Mr Katontoka said most people engaged in farming are financially excluded.
“We are engaging BoZ and the Bankers Association of Zambia so that we find solutions to bring the unbanked farmers on board. We want to see a situation where BoZ can reduce reserve ratios for commercial banks that are supporting farmers. This incentive will allow banks to be flexible when lending to the agriculture sector,” he said during a discussion themed ‘Agriculture-banking for food’ at the Zambia Finance and Investment Euromoney conference held last week.
At the same event, Agriculture Consultative Forum chief executive officer Joseph Mbinji said introduction of the Warehouse Receipt System will increase the uptake of smallholder farmers in accessing funds.
Rabobank International senior consultant for food and agriculture research Sierk Plaat also said Africa has the potential to provide resources which the world is lacking.
“The world needs Africa to produce more food since the potential for land and production of good yields of crops still exists but there is need to improve access to capital, ensure long-term financing agreements and many other things that will increase productivity,” he said.
He advised African countries to create a momentum for young people to venture into farming if Africa is to feed itself by 2030.
“Agriculture has vast opportunities for young people but they prefer to embark on careers where they will wear suits,” Mr Plaat said.
Making a contribution, Zanaco director of corporate banking Ignatius Mwanza said the bank is supporting all segments of the farming community.
“We believe smallholder farmers present an emerging market opportunity for both local and international investors hence the need to finance them and their activities,” he said.

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