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Author
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Kwecha, Rectise N.
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Title
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The Role of agricultural financing on agricultural productivity for small to medium scale farmers in Zimbabwe
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Abstract
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The purpose of the study was to examine how agricultural finance in Zimbabwe affected small and medium-scale farmers' agricultural productivity. The study aims to evaluate the major agricultural finance needs of farmers, the difficulties they face in obtaining agricultural financing, the sufficiency of agricultural financing provided to farmers by commercial banks, and whether agricultural loans have an effect on farmers' productivity in Zimbabwe. The findings indicate that purchasing farming equipment, buying supplies, paying for land costs, refinancing an older loan, and also performing land renovations and repairs are the primary financial areas farmers need to focus on. The outcomes also demonstrated the difficulties farmers have in obtaining agricultural financing. Land rights, high borrowing rates, collateral with a narrow purpose, financial performance, and transactional risk are some of these difficulties. The findings of the study demonstrate how agricultural loans affect farmers' production. The type and structure of finance for the majority of farming businesses influences not just their capacity to expand and grasp opportunities, but also their capacity to draw in and hold on to other resources crucial to their long-term viability, profitability, and productivity. Farmers before land reforms of business, agricultural production is strongly influenced by the fact that inputs are converted into outputs with significant time lags, causing many farmers to balance their budget during the season when there are high expenditures for input purchases and consumption and few revenues. The budget balance for the year can limit agricultural production if there is limited access to agricultural financing sources.
If increased Agricultural productivity is to be obtained, policies pertaining to agriculture should interact very closely with financial institutions. To encourage capital inflows or investments in agriculture, which then have a favourable impact on agricultural productivity, a consultative strategy involving both stakeholders from financial institutions and agriculture should be adopted. The banks should start using growth strategies like backward or forward integration with the important stakeholders. It should guarantee ideal resource distribution and efficient loan disbursement. the lowering of interest rates in relation to loans for agriculture. As a result, the bank will be able to do a risk-return trade-off.
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Date
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June 2022
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Publisher
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BUSE
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Keywords
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Agricultural financing
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Productivity
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Medium scale
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Supervisor
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Mr. E. Chitombo
