Banks reject 99-year leases

via Banks reject 99-year leases – The Zimbabwe Independent March 18, 2016

DESPITE government assurances to beneficiaries of Zimbabwe’s controversial fast-track land reform programme, local banks continue to reject 99-year leases as collateral, the Zimbabwe Independent has learnt.

Herbert Moyo

Finance minister Patrick Chinamasa last week on Tuesday announced government and bankers had come up with a draft tradable document which will pave the way for farmers to access bank loans using their 99-year leases as collateral.

“We have successfully, in consultation with the Ministry of Finance, Ministry of Lands, Ministry of Agriculture and the Bankers Association of Zimbabwe, come up with a draft that incorporates tradable features. This means that when one is granted the 99-year lease they can use it as a document to go and borrow money,” Chinamasa announced, while addressing students at the 29th Joint Staff College course in Harare last Tuesday.

However, checks carried out this week by this newspaper show that banks are still digging in, with some dismissing Chinamasa’s claims as “media stories which do not inform our policies.”

“We haven’t received any communication to that effect. These are some of the issues we also just read about in the media, but we do not act on the basis of those reports.

We wait for official instructions from the (bank’s) management. So as things stand, our position is that nothing has changed and we are still not giving out loans on the basis of the 99-year leases,” said an official from Agribank’s loans division on Wednesday morning. Officials from other banks, including FBC and ZB, who spoke on condition of anonymity, also said they had not received any official communication from their management regarding the acceptability of the 99- year leases.

Some BAZ officials said Chinamasa had rushed to announce before the conclusion of talks between the government and the bankers.

“There was a meeting to explore the issue last month and it was agreed that there should be another meeting this month. However, we have not had that follow-up, but Chinamasa has already rushed to make an announcement when no agreement has been reached,” said one BAZ source.

BAZ executive director Sijabuliso Biyam did not respond to calls and messages sent to his mobile phone. Government embarked on the land reform programme in 2000 with the aim of redressing colonial imbalances by expropriating 11 million hectares from over 4 500 white commercial farmers for re-distribution to the indigenous African population.

The beneficiaries, who were issued with 99-year leases, have however failed to ensure full productivity as they have they lacked capacity and struggled to access loans from banks. The banks have been insisting they want transferable title as collateral, not 99-year leases


  • comment-avatar
    Joe Cool 6 years ago

    Land tenure in Zimbabwe (like everything else) is at the pleasure of President Mugabe. 100% title deeds didn’t achieve much for former white farmers, so where will you go with a 99 year lease if you incur Bob’s displeasure ( as a number of ex-ZanuPF members have found out)?

  • comment-avatar
    Colbert 6 years ago

    Ahhh the infamous 99 year lease. Does no one understand that Leases are not collateral? not withstanding the fact that the lease as it progresses becomes an ever depreciating form of collateral but the fact that it can be given and taken away with a simple ministerial offer letter to another means that any lender would have had their collateral ripped away from them. That is a level of risk no sane person would ever take on.

    If you lend a friend money do you do it on the assurance that if they fail to pay you get their leased car?

  • comment-avatar
    Johann 6 years ago

    Well said Joe Cool. What good is a 99 year lease if a title deed wasn’t good enough.

  • comment-avatar
    Doris 6 years ago

    Hee ha!! That has truly made my day!!

  • comment-avatar

    co-lateral must have some rock solid value.
    land in zimbabwe has zero rock solid value.
    its a play-thing for mugabe to stay in power for ever and ever.
    the banks won’t lend for that reason.
    mugabe must retire.

  • comment-avatar
    Tiger Shona 6 years ago

    The intent is to steal. They want to take but NOT replace. The Min. Of Finance said ” We have to DEVELOPE a culture of paying of loans”. According to him, paying back then was not a requirement.
    These People are crooks.