Source: 99-year-lease bankable document ready | The Herald July 4, 2016
Tinashe Makichi recently in Victoria Falls
The Ministry of Lands and Rural Resettlement has completed the redrafting of the 99-year- lease bankable document and is now ready to be presented to Cabinet. Minister Douglas Mombeshora said Government and bankers had ironed out sticking points that previously made banks reluctant to accept the leases as security. Dr Mombeshora said once the relevant processes are completed, farmers will now be able to use the land titles to obtain loans from banks to finance their activities.
The redrafted document was done in consultation with the Ministries of Finance and Economic Development, Agriculture, Mechanisation and Irrigation Development and the Bankers’ Association of Zimbabwe.
“The 99-year-leases were introduced in 2006 and have been in existence since that time but there were challenges in terms of securitisation of that document. We engaged the Bankers Association of Zimbabwe since 2014 and I am glad to say we finalised those discussions in March this year .
“We have ironed out all the issues that were raised by our financial institutions and we have just finalised redrafting the 99-year-lease incorporating the changes. We can gladly say its now a bankable document,” said Dr Mombeshora.
Pursuant to ensuring that farmers achieve maximum productivity, Cabinet has approved the Land Commission Bill in a bid to weed out multiple farm owners, resolve land disputes and deal with land beneficiaries leasing out farms to those who are not entitled to them.
The land audits will be carried out by the Land Commission which is set up under Section 296 of the Constitution. According to the Constitution, the Commission will carry out periodic audits and ensure accountability, fairness and transparency in the administration of agricultural land controlled by the State.
COMMENTS
Oh, the irony…. still trying to get money from the West.
Good luck to any bank that lends money using that lease as collateral. Kiss your money good bye.
So what happens when someone uses his 99-year leases for three farms to secure 3 loans, and is then found to be a multiple farm owner? Errrr… we never thought of that.
“……Govt and bankers had ironed out sticking points…..”, “………once the relevant processes are completed farmers will be able to use them….”. Another typical Herald story that hoodwinks who, I wonder: the farmer who reads only the Herald or the prospective money donors? Absolute clap-trap. Govt will have to repeal the Land grabbing Act first before any bank accepts any phoney pieces of paper. Stupid people.
There is no way a lease can be used as security unless I am missing something here.
A thing or asset that can be used as security is something that the bank or lender can take ownership of and then sell to get their money back.
So if a farmer defaults on repayments which is very likely in this case, how will the bank realise its money from a lease?
If say a farmer borrows $30,000 from the bank and then there is a drought or some other natural disaster and therefore cannot service the loan how will the bank recover its money if all they got as security is a valueless lease?
How much more trustworthy will the 99 year lease document be, than the true owner’s title deeds?
Let’s hope there is indeed something there acceptable to lenders – like acceptable government guarantees for defaulters. It would be the beginning of Agro recovery and much else.
An acceptable government guarantee from a bankrupt government that ‘doesn’t have a penny’? Stop dreaming.