TN to launch Cattle Bank
By Editor
Tuesday, 27 March 2012 13:23
HARARE – Small-holder cattle farmers are set to be absorbed into Zimbabwe’s
mainstream economy through an initiative by TN Bank to launch a Cattle Bank
(CB) that will recognise cattle as a bankable asset.
Speaking at the Euro Money — Zimbabwe Investment Conference in Harare last
week, CB project manager Patricia Chizengeya said communal cattle farmers
will be able to unlock the value of their cattle through the TN cattle
banking project.
The conference was meant to explore investment opportunities in Zimbabwe.
Chizengeya said cattle have always been used as a status symbol and regarded
as a living bankable investment in Zimbabwe and most African countries but
communal farmers had not benefited much from their cattle as they remained
secluded from mainstream economic activities.
“Communal farmers will be incorporated into mainstream banking. Farmers will
now be able to access capital and also earn a return on the cattle deposit
that they make thereby increasing sources of income whilst still retaining
their cattle,” said Chizengeya.
Under the new banking concept, the TN livestock bank will act as a normal
bank with farmers depositing and withdrawing their cattle in TN Bank’s
livestock banking branches provided they have clearance certificates and
clear identification particulars of those cattle.
Farmers will be issued with certificates of deposit as evidence of any
transaction and can withdraw the cattle as and when they want. The cattle
can also be withdrawn as cash while TN will also be responsible for
transporting the cattle to and from the banks.
She said farmers will not be able to withdraw the exact beast that they
would have deposited and will be given an equivalent as stated in the grade
on the certificate of deposit.
According to Chizengeya, Zimbabwe has about five million cattle and of
these, 90 percent are owned by small-holder farmers. At an estimated value
of $400 per heard, small-holder farmers have $1,33 billion locked in the
cattle yet they are considered as un-bankable asserts.
“To make the small-holder farmers bankable, farmers will be able to use
their cattle deposits as security when accessing loans from TN Bank. The
farmers will now be able to open accounts and enjoy TN banking services,”
she said.
The banking initiative, Chizengeya said, will also help boost the national
cattle herd through increased productivity. Cattle fattening programmes
would also be introduced in the cattle banks to add value on the cattle.
Zimbabwe’s cattle production is still suffering from a low productivity rate
of 45 percent, poor bull-to-cow ratios, a low carcass weight and a lengthy
period of up to four for cows to have calves, according to Chizengeya.
Speaking at the same event, Amon Muza TFC Capital managing director said the
cattle banking project will also transfer the risk of loss of livestock to
diseases and theft from the farmer to the bank which will have a better
capacity to absorb the risk, she said.
“TN Bank will defray these costs and its charges from the expected growth of
the herd before paying out the value of such growth to the livestock. At the
time of deposit, TN will agree an interest rate on the cattle deposit with
the farmers,” Muza said.
She said the cattle will be continuously vaccinated and should a disease
outbreak occur, culling of the herd will be done, followed by a restocking
exercise after the disease subsides.
TN says it has already carried out research on the viability of the project
and would soon launch the livestock banks in Mashonaland East, Midlands,
Matabeleland North and South provinces and Masvingo where levels of
reception of the livestock banking project was high, according to
Chizengeya.