Recap of Day 1: 4 November 2009 Harare , Zimbabwe

1. AFRACASouthern Africa Sub regional Workshop of “Rural Finance Intermediation for Growth and Wealth Creation in Africa”, organized by the African Rural and Agriculture Credit Association Recap of Day 1: 4 November 2009 Harare, Zimbabwe

2. Session 1Opening Session • MrKunakawelcomed participants to the 2009 AFRACA Sub-Regional workshop , which is being hosted by RBZ, CBZ and Agribank. • Remarks by the AFRACA Secretary General • The workshop is expected to expose AFRACA member institutions to new and workable developments in the rural finance service provision and to generate recommendations to improve the rural finance service provision. • Remarks by the SACRAT Chairperson Ms Zualo: • the Chairperson of SACRAT gave an overview of the operation, objectives and achievements of AFRACA • Keynote address by the Guest of Honour • The Permanent Secretary of MOF noted that the agricultural sectors, in most of the African Countries, faced challenges in infrastructure re-habilitation of equipment and re-tooling, working capital availability and market arrangements and hoped the workshop discussions would focus on these. The GoZ is ready to create policy frameworks to enable financial institutions to extend / increase business with the small scale farmers

3. Session 2 SETTING THE STAGE • Types of Rural Finance Approaches suitable for Africa: MrMalaba, AGRIBANK , Zimbabwe • Progression from banks not knowing how to work with rural poor to the current position where they are no longer non-bankable  • There is a role for all players, govt , banks, farmer associations etc  • There is no formula for rural financing • Best Practice in financial intermediation for growth and wealth creation, Swaziland. MrMsibi, FINCORP •  The Sugar Cane Financing Model with three players, the farmer, the marketer, the financier • The model while restrictive, can be replicated

4. Session 1: Setting the StageDiscussion • Linkages with farmers: • the financial institutions have taken the initiative and identified opportunities before engaging the farmers, in Swaziland • The Sugar cane projects survived the Global financial crisis by maximizing sales to preferential markets • FINCORP does not insist on security. • By closely collaborating with farmers FINCORP has managed to achieve high repayment with defaulters at 10% • The case of Ghana where Rural Banks have successfully mobilized savings in rural areas • Mozambique need for infrastructure: • roads and communication systems are poor and financial institutions are unlikely to expand to these areas unless financed by Govt. A development institution, through which Govt would extend loans to trhhe rural poor could be the answer 

5. Session 3Zimbabwe Country Experiences • Zimbabwe Irrigation Initiatives, MOA, MrMuzamhindo • The histry of irrigation financing in Zimbabwe • Financing system for irrigation has broken down • Currently about 50% of land needs irrigation - more land can be put under irrigation • Banking on Women and the Poor: CBZ, Zimbabwe, MrsDingani • Demonstration that a Commercial Bank can reach rural poor through support to the women, the poor and the youths • CBZ accepts household items as security and has suspended the requirement for usual collateral • Discussion • Although CBZ has not involved Farmer Associations in its financing of women and youths, there is a role for these and other players • The involvement of Govt in screening of loans could open thesystem to abuse as has happened in e g Zambia. But govts have played important roles eg in infrastructure and irrigation, provision of advisory services, and marketing. Govts could take on other responsibilities e g value addition. Final agreement was that govts has a role in the long term economic development but should leave short term development for other institutions • Overal African govts underfunded agricultural sectors and had not yet increased the budget allocation to 10% as in the Maputo AU agreement.