Exploring the challenges of bank credit facility in financing agriculture in Zimbabwe ( a case study of Zimbabwe Agribank 2009-2015)
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The purpose of the study was to identify the challenges faced by farmers in accessing agricultural financing in Zimbabwe’s. This was necessitated by the continued poor performance of the agriculture sector and the continued lack of finance for production purposes by new farmers. The objectives of the study were to determine the nature and significance of agricultural finance to agricultural productivity, to identify the factors limiting the accessibility of finance to new farmers, to identify the reasons why banks restrict credit towards new farmers, and finally, to identify and suggest innovative agricultural financing models that can be adopted by Zimbabwe’s new farmers. The exploratory survey method was used with questionnaires and interviews as the research instruments. Primary data was extracted from a sample of 30 new A1 farmers from Goromonzi District, 10 employees from commercial banks. The major findings of the study were that farmers are using finance from personal savings and crop and livestock sales to finance farm operations. The research also established that agricultural finance is very significant in improving agricultural productivity and the majority of farmers believed that if access to finance were improved productivity would also increase. In addition, the study found that lack of collateral and risk were the major factors inhibiting the provision of finance to the agriculture sector. In addition, it was recommended that financial education be provided first as it is imperative in better preparing farmers for their interaction with finance providers.