THE People’s Own Savings Bank (POSB) has earmarked US$22,5 million to fund farm mechanisation, as it deepens support towards Zimbabwe’s productive sectors to drive economic growth and ensure national food security.
Launched as part of an agreement between POSB and the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development, the facility will provide farmers with long-term funding to acquire modern equipment at concessionary interest rates of about seven percent over a 5-20 year period.
This will improve agricultural productivity, increase crop yields, lower production costs and strengthen Zimbabwe’s export-oriented value chains through greater mechanisation.
Agriculture is the foundation of Zimbabwe’s society and financial system, driving food security, job creation and industrial raw material supply.
It contributes roughly 11 percent to 20 percent of the Gross Domestic Product (GDP) and provides a livelihood for about 60 percent to 70 percent of the country’s population.
POSB chief executive Mr Garainashe Changunda told the bank’s annual general meeting that the facility is part of the financial institution’s strategy to support the productive sectors in line with Vision 2030.
Mr Changunda said agriculture remained a strategic sector because of its direct contribution to food security, employment creation and export earnings.
“We signed an agreement with the Ministry of Lands and Agriculture where our farmers can come through and raise the necessary funding to finance the modernisation of their farms.
“It is a US$22,5 million facility available to farmers keen on transforming their businesses.
“We intend to grow the economy in line with Vision 2030 and farmers are part of that story. We can only grow the economy if we have food security. Some of the farmers are involved in export value chains.
“If they mechanise their operations, it means they can manage their costs down and generate enough income to cover their costs.
“We believe in smart agriculture and the only way to achieve that is if the bank partners with farmers by providing them with the equipment and funding that they require,” said Mr Changunda.
He added that the tenure and relatively low interest rate were designed to make the financing affordable for farmers.
“For the farm mechanisation programme, there is a five-year tenure and the interest rate is around 7 percent. It’s quite low and it’s good for the farmers because they are given more time to buy the equipment and pay over time,” he said.
According to Mr Changunda, adequate financing is critical in ensuring strong agricultural production and strengthening the country’s food security. The facility builds on POSB’s growing support for agriculture.
In 2024, the bank secured a US$10 million facility from the African Export-Import Bank (Afreximbank) under the African Trade Facilitation Programme (AFTRAF) to increase funding for Zimbabwe’s key productive sectors.
Beyond mechanisation finance, POSB also provides tractor financing, crop and livestock insurance through its bancassurance partnership with AFC Insurance and seasonal funding for strategic crops including winter wheat.
Mutapa Investment Fund head of banking and financial services, Mr Tapiwa Mangwana, said the bank’s sustained investments had positioned it for long-term growth while strengthening its capacity to support all sectors of the economy.
“The progress achieved thus far gives us confidence that POSB is building the foundations for a strong institution capable of delivering improved customer experience, greater operational efficiency, enhanced competitiveness and a sustainable growth plan.
“The investments being made today will not only shape the bank’s future performance but will also strengthen its ability to serve markets across all sectors of the economy. We therefore look forward to seeing the full benefits of these initiatives reflected in the bank’s growth, profitability, market position and environmental impact,” said Mr Mangwana.
Economist Mr Tinevimbo Shava said access to affordable financing remained essential for improving the competitiveness of Zimbabwean agriculture.
“Financing support helps farmers modernise their equipment by eliminating high upfront costs, allowing them to spread payments over time and manage seasonal cash flows.
“This investment enables farming operations to scale up, optimise resources and remain competitive in the rapidly evolving agricultural industry,” said Mr Shava.
The mechanisation programme comes as Government and private sector stakeholders intensify efforts to increase agricultural production through improved irrigation infrastructure, expanded financing partnerships and greater adoption of modern farming technologies, with institutions such as ARDA estates, irrigation schemes and commercial banks playing a key role in supporting the country’s food production targets.-herald
