Major Banks join hands with Musika to support smallholder farmers.
Early last year, Musika signed Memorandums of Understanding (MOUs) with First National Bank (FNB) and Ecobank Zambia Limited to enable smallholders to benefit from a tractor finance leasing scheme.
Musika, together with Conservation Farming Unit (CFU), signed the MOUs on 9th August and 26th July 2013 with FNB and Ecobank, respectively.
The facility gives small and emergent farmers an opportunity to access credit to buy tractors and associated implements from approved vendors to utilise on their farms.
With Musika's support, tractor owners are trained to offer mechanised services to farmers in their respective areas. This was aimed at promoting early land preparation and adoption of improved farming methods like conservation agriculture resulting in increased productivity and income levels.
Musika Managing Director, Reuben Banda, explained that because lending in the smallholder market carried an element of unknown risk to financial institutions, Musika's role was to mitigate the initial risks during the pilot stage. During this period, financial institutions had an opportunity to learn and understand the market, and determine their own business case for scaling up lending into the smallholder market.