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Banks can now seize farm leases over debts - RBZ

08/02/2018 00:00:00
by Staff Reporter
 
Major land policy shift ... John Mangudya
 
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HARARE: Financial institutions can now seize farms from farmers who fail to service loans or repay debts, the Reserve Bank of Zimbabwe (RBZ) has said.

RBZ governor John Mangudya told journalists at a media briefing during the presentation of the monetary policy early this week that government has "tweaked" the much-maligned 99 year-leases to pacify restive financial institutions as part of its ongoing shift in policy since President Emmerson Mnangagwa's November assumption of power.

Mangudya said he had met bankers and agreed that they would now accept the leases as security for loans.

"The issue is that the government has improved the 99 year-lease; it now has a transferability element, now has a bankable element.

"Before the changes, there was no provision in the old document about financiers, but it now provides the financiers with the comfort for lending," Mangudya said.

Mnangagwa's administration has, in a break with former President Robert Mugabe's policy, extended the issuing of the leases to white commercial farmers.

Mangudya seemed to suggest the 99 year-leases are now permanent tenure and that banks can now seize them in the event of failure to pay.

"It also says in the unlikely event of government taking over someone's farm and that person had been given a loan at the Bank the first port of call for compensating goes to the financier," the apex bank boss said.

He added that the changes are in line with Mnangagwa's new policy thrust.

"In line with the current dispensation's aspirations to transform agriculture into viable business proposition and taking into account the significant improvements made by government on the 99 year-leases to enhance the security of tenure of the lease and making it bankable and transferable.

"The Bank (RBZ) has agreed with banking institutions for them to accept the 99 year-leases as security for accessing credit in line with the provisions of the leases," said Mangudya.

Mugabe, at the turn of the century, sponsored violent expropriation of land in a programme has been blamed for the country's economic problems.

The veteran ruler was deposed last November by a military coup that paved the way for Mnangagwa's elevation to the top job.



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