Zimbabwe ‘Cattle Bank’ Takes Deposits That Moo
Jun 18, 12:40 PM EDT
BY GILLIAN GOTORA
ASSOCIATED PRESS
Zimbabwe’s first “Cattle Bank” has just opened its books in a unique kind of
banking where owners bring in their animals as collateral against cash
loans.
For many rural poor in this southern African country once wracked by
world-record inflation, it’s the first bank account they’ve ever had.
“Cattle banking is the only way owners can get monetary value for their
animals without having to sell them,” bank executive Charles Chakoma told
The Associated Press amongst fields and small farming plots near Marondera,
east of Harare, the capital.
Owners accrue interest and have the option to get back their cattle after an
initial two years or leave them with the bank for longer. Depositors can get
loans of an equal value of the cattle they have put in the bank.
In the event the owner fails to repay the loan, the bank keeps the animals.
When an owner dies, a close member of the family can take over payment of
the loan and ultimately get the cattle back.
The bank, which owns several fast food outlets across the country, says it
also will slaughter aging cattle for beef and replace them with more
productive cattle of the same value.
Mukurazita, 69, and his wife, Elizabeth, 66, kept about 70 head of cattle at
Masomere village, 140 kilometers (90 miles) from Harare. But poor health
stopped them from looking after their herd and at least 20 animals died or
were stolen, Elizabeth Mukurazita said.
Now they have “deposited” 24 cattle at the TN Bank, named after its founder,
financier and social innovator Tawanda Nyambirai. The couple now has $10,000
worth of cows in the bank.
“If we only knew about this cattle banking before, we could have saved all
of our herd,” Elizabeth Mukurazita said.
A veterinarian checks the animals and the bank pays to transport them to
paddocks it has bought across the country for fattening and cross-breeding
programs. Owners are issued with the bank’s `Certificate of Cattle Deposit’
as proof of a transaction.
As bank officials log in their cattle, the Mukurazitas look worriedly at a
scrawny calf whose mother has died days before. Two other calves nurse from
their mothers. The envious, starving orphan makes an attempt to reach for
the cow’s udder but is kicked aside and wanders off to graze awkwardly on a
small patch of grass.
Untended, it will die within days, said Chakoma, the banker. The state
veterinary official passes the calf and values it at $49.
He said the bank wasn’t supposed to accept unhealthy animals, but that this
particular calf might survive because it was able to graze on its own. He
requested anonymity saying he needed his superiors’ permission to speak to
reporters.
Only 20 percent of Zimbabwean cattle are in commercial ranches. The rest –
some 3.5 million village animals – are valued at more than $1 billion,
Chakoma said. The TN Bank wants to reassure Zimbabweans that despite years
of world record inflation their bovine savings are safe, he added.
In traditional rural society, cattle symbolize wealth and play a role not
just in farming but as marriage dowries, funeral sacrifices and appeasers of
ancestral spirits. Many cattle owners are reluctant to give up such a valued
status symbol, but Chakoma said cattle banking eases the burden on the
elderly, left behind as young people head for the cities.
“Farmers may not want to part with their animals but we try and persuade
them to keep a few for tilling and milking as the rest will just be a burden
to them,” he said.
During the dry season, there is less pasture and cattle roaming in search of
grass often get lost or stolen. In winter, the cold can kill them.
Interest can be paid in cash or cows. The Mukurazitas say they’d prefer it
in cows so that their son can take over managing a new herd and get more
land later.
“We don’t necessarily want the cash; we want to improve our herd,” said
William Mukurazita.
http://www.washingtonpost.com/
Here is a look at how Zimbabwe’s cattle bank works, which allows farmers to
borrow money
By Associated Press, Updated: Wednesday, June 19, 1:00 AM
MARONDERA, Zimbabwe — HOW A CATTLE BANK WORKS:
— The bank sends a veterinary official to inspect a farmer’s cattle and
assesses their monetary worth.
— Based on that, owners can get loans up to the value of the cattle they are
banking as collateral.
—The bank pays 10 percent interest a year on the value of the cattle
deposited, which can be paid out in cash or additional cows.
— Owners have the option to get back their cattle after an initial two years
or leave them with the bank for longer.
— In the event the owner fails to repay the loan, the bank keeps the
animals.
— When an owner dies, a close member of the family can take over payment of
the loan and ultimately get the cattle back.
— The bank reserves the right to slaughter aging cattle to sell the beef and
replace them with more productive cattle of the same value.
— The bank also carries out breeding programs and gets to keep the calves of
cows deposited.