CBZ agro-yield invests US$75m to boost agriculture sector

LIVINGSTONE MARUFU

CBZ Agro-Yield has injected US$75m into agriculture for the 2024/2025 summer cropping season as part of efforts to increase production.

The unit was a key financier of the National Enhanced Agriculture Productivity Scheme (NEAPS), which required farmers to repay their loans through deductions from crop payments upon delivery. Under this arrangement, the government acted as a guarantor, stepping in to cover defaults.

However, widespread loan defaults severely impacted CBZ Agro-Yield’s operations, as the funds were meant to be reinvested in other economic sectors. Consequently, the lender opted to independently support farmers, setting its own funding terms.

CBZ Holdings Limited CEO Lawrence Nyazema told Business Times that the bank continues to support farmers without requiring collateral, provided they have a proven track record of productivity.

“I would say around 15% of our half-a-billion-dollar book goes toward agriculture,” Nyazema said.

“For years, we have been one of the main financiers of agriculture. We take it so seriously that we established a standalone entity solely focused on agricultural funding.”

He explained that CBZ Agro-Yield was formed to address the challenge of farmers lacking land title deeds and collateral.

“Our input distribution model was designed to support commercial farmers without security. At the same time, we maintained an agribusiness platform within CBZ Bank that offered commercial loans to those who could afford them and had security,” he said.

Nyazema expressed confidence in the quality of CBZ’s lending book, emphasizing that the institution remains committed to agricultural financing.

“We continue to play our part and encourage other institutions to not only provide input financing but also explore ways to climate-proof agriculture. That’s an area I’m particularly proud of. You won’t find two or three successful black farmers who don’t mention CBZ’s support.

“Yes, we’ve been burned in the past by loan defaults, but I take pride in the growth we’ve fostered, especially among black farmers. I envision at least a thousand successful black commercial farmers, and 90% of them will credit CBZ for their journey,” he said.

Nyazema noted that at its peak, CBZ allocated up to 50% of its lending portfolio to agriculture through both CBZ Bank’s agribusiness division and Agro-Yield.

“That figure has since declined, but we remain a significant player in agricultural financing,” he said.

Beyond agriculture, CBZ has expanded its financing to other key economic sectors, including mining and manufacturing.

“I would argue that we are the largest financiers of gold mining. We are also major backers of light manufacturing. Our lending book is now more diversified, carrying significantly less risk than in the past,” Nyazema said.

Related