CBZ drives innovations to de-risk oilseed sector

ZIMBABWE Stock Exchange (ZSE) listed entity, CBZ Holdings Limited, is strengthening its collaboration with the Government and other key stakeholders across the oilseed value chain to de-risk the sector through structured financing and offtake agreements.

This was said by CBZ, Zimbabwe’s largest financial institution, head of farming operations, Mr Collins Mpofu, at the national oilseed (cotton, sunflower and soya beans) conference recently held in Kadoma.

Zimpapers and its partners organised the conference, which ran under the theme: “Import substitution, rural industrialisation and smallholder farmer empowerment through sustainable oilseed production and value addition.”

Mr Mpofu said structured financing was more than just access to credit.

“It is smart capital with risk mitigants, like warehouse receipts, insurance, input credit and technical support. It’s financing that flows through the entire value chain, and not just to the farmer’s gate.

“Structured financing is about designing smart financial solutions that are anchored in real productivity.

“Any production is futile if it does not have a market to absorb the product in spite of how sound the financing can be.

“Even the best financing is at high risk without market certainty, and this is where offtake agreements come in. They flip the script for both the farmer and the bank,” he added.

A combination of structured finance and offtake agreements unlocks value and turns farming into a sustainable business, giving banks confidence to lend and providing processors the raw materials they need and stabilising prices for consumers.

Explaining the benefits of engagements, Mr Mpofu said when farmers have a signed buyer, they do not just have a market, but also have leverage.

When a farmer submits a loan application form with a guaranteed buyer at the end of the chain, banks are no longer financing risk, but get a financing opportunity.

“Looking ahead, I challenge all of us, fellow financiers, aggregators, agro-processors and policymakers to strengthen our strategic partnerships and continue to build integrated financing ecosystems that follow the oil seed crop from seed to shelf.

“Let us institutionalise offtake agreements that empower farmers and de-risk lending as well as invest in trust, productivity and the future of Zimbabwean agriculture,” he said.

When agriculture is de-risked, growth potential is unlocked, and more jobs are created, farmer resilience is built and the country moves closer to food and nutrition security, as well as expands its exports.

CBZ Agro-Yield, a subsidiary of CBZ Holdings, is designed to cater for the entire agricultural value chain from input supply and primary production under its farming and supply chain divisions and market access through the commodities division.

Smallholder and commercial farmers are provided with working capital financing for both short and long-term production needs through guarantees and loans.

“We provide input finance schemes to facilitate access to seeds, fertilisers, chemicals and fuel through structured financing models that reduce the upfront burden on farmers.

“Under asset financing, we offer support to acquire tractors, irrigation equipment and processing machinery to boost productivity,” he said.

CBZ is also empowering farmers with knowledge on the best agronomic practices, input use efficiency and post-harvest handling in collaboration with inputs suppliers and extension officers.

“We are using satellite tracking and our field officers to monitor progress throughout the season to ensure timely interventions and successful crop outcomes under our monitoring and evaluation wing.

“The impact of CBZ Agro-Yield has seen significant thousands of hectares transformed from dryland to irrigated production, increased yields and improved livelihoods of our small-scale farmers across all agricultural enterprises.

“But more than numbers, it’s the story of farmers who can now send their children to school, build a home, or expand their operations that truly inspires us as CBZ Agro-Yield,” he said.

CBZ Holdings Limited and Ecocash were the biggest contributors to the success of the conference.-herald