Tapiwanashe Mangwiro

Zimbabwe needs to integrate agricultural finance, insurance, warehouse receipts and institutional capital to close the sector’s persistent funding gap and unlock the next phase of agricultural growth, CBZ Agro-Yield chief executive officer Collins Mpofu has said.

Speaking at the National Agriculture Conference and Expo (NACE) 2026 in Harare, Mpofu said Zimbabwe’s agricultural financing challenge was not simply a shortage of money, but the need to develop financing models that reduce risk and link funding directly to production and markets.

“The frontier is integration, connecting value-chain finance, receipts, institutional capital and insurance into one stack,” Mpofu said.

His comments come as the agricultural sector faces a substantial funding gap. According to the CBZ Agro-Yield presentation, the 2024/25 agricultural season required about US$1.6 billion, while banks pledged approximately US$500 million.

However, only about US$200 million of the pledged funding had reached farmers by January 2025.

Mpofu said market-linked financing models were proving more effective because repayment was structured around the agricultural value chain rather than relying solely on traditional collateral.

“Key insight: repayment follows structure, not intent — build finance around the value chain and recovery follows,” he said.

The CBZ Agro-Yield presentation identified value-chain finance, contract farming, warehouse receipts, institutional and pension capital, insurance and donor-supported de-risking facilities as important channels for expanding agricultural funding.

Under value-chain financing, banks provide funding across the production chain, including inputs, agronomy and insurance, with repayment linked to crop deliveries.

Contract farming similarly allows contractors to finance inputs against future crop deliveries.

Mpofu said Zimbabwe could also make greater use of agricultural commodities as collateral through warehouse receipt financing.

Under the model, grain stored in certified warehouses generates a negotiable receipt which can be used to access credit or facilitate trading through the Zimbabwe Mercantile Exchange.

The presentation noted that warehouse receipts had accumulated US$171.7 million in value by October 2024, although the volumes remained relatively small compared with national grain intake.

Institutional investors could also play a larger role in agricultural financing. Mpofu said the pension industry had assets of about US$2.63 billion as of June 2025, with a 20% prescribed-asset floor providing potential space for investment in agricultural instruments.

“AFC Agrobills” and other agricultural instruments could help channel longer-term domestic capital into the sector, while insurance and guarantees could absorb some of the risks that have traditionally discouraged lenders.

Mpofu said climate risk remained one of the biggest constraints to agricultural lending, particularly following the 2023/24 El Niño drought, which saw agricultural output contract sharply and increased the food import bill.

The CBZ presentation noted that fewer than 5 percent of smallholder farmers had crop insurance, highlighting the need to mainstream insurance within agricultural financing.

“Insurance in every facility, receipts as collateral, institutions as funders,” the presentation states in outlining the strongest financing structure.

Mpofu also identified land tenure, the cost of credit, currency transition and limited access to formal financial services among the structural constraints that needed to be addressed.

The presentation noted that fewer than 40% of smallholders used formal financial services, while women and young farmers faced some of the widest financing gaps.

To close the gap, Mpofu proposed six practical interventions: completing the rollout of title deeds, mainstreaming agricultural insurance, deepening warehouse receipts and the commodity exchange, attracting institutional capital, localising export value-chain finance and digitising the last mile.

He said Zimbabwe already had many of the components needed to transform agricultural finance and should now focus on integrating them and taking them to scale.

“The opportunity is integration and scale, not experimentation,” the presentation states.

Mpofu said such an approach would enable Zimbabwe to mobilise more domestic capital, improve smallholder inclusion and strengthen the resilience of agricultural production while supporting the sector’s targeted expansion to a US$15.8 billion economy by 2030.