Zimbabwe’s economy might be battling but there is one commodity it produces that’s still in high demand, and that’s tobacco. In fact, the industry attracts 55% of all agricultural loans.
According to the Financial Gazette, in 2013 the country’s agriculture sector as a whole received US$650 million in loans, while last year it was given around an additional US$50 000. Joseph Mverecha, Bankers Association of Zimbabwe representative and Agribank’s head of strategy, says tobacco is more reliable in comparison to other crops. It’s also a safer option for bankers because of the high repayment rates.
In Zimbabwe, agriculture in general is still in relatively good shape (more than 70% of the population relies on it for a living in some way or another). Since the country moved to the US dollar in 2009, nearly 20% of the US$3.8 billion in loans made available by the banking sector goes toward agriculture. This allocation is placed second to the personal/individual sector.
