Bank Sues Zim’s New Farmers Over Loans
By Criswell Chisango
Karoi, August 20, 2013 – Several new farmers who confiscated farms under the government backed and often violent land reform programme are seeing red after one of the country’s leading commercial banks filed lawsuits against them for allegedly defaulting in repaying loans advanced during the 2009-10 farming season.
Samuel Muyemeki of Mapira and Associates Legal Practitioners, who is representing six farmers facing litigation recently applied for a postponement of the matter in which CBZ Bank is suing the new farmers for defaulting on paying back loans on the basis that there had been some developments after the summons were issued.
‘’There were some developments between the days that summons were issued as there were deductions and adjustments made by the government. The plaintiff (CBZ Bank) was reluctant to give statements and it is defective as the bank is claiming high figures when government paid at least 75 percent of loans advanced’’ Muyemeki told the court.
However, Bruce Tokwe of Titan Law Chambers representing CBZ Bank insisted that the matter be heard urgently.
‘’The law of contract is based on repayment of loans advanced and these contracts were simple as the defendants (new farmers) flouted in repaying loans advanced by my client. To make such an application is embarrassing and flouting the rule of the honorable court. The defendants failed to repay loans advanced to them and you can read outside the contract’’ said Tokwe.
Magistrate Robson Finsin will on August 27, 2013 deliver a ruling on the matter in which CBZ is seeking an order compelling the new farmers to repay the loans in full.
Farmers, who grabbed farms under the Zanu PF -led land grab exercise are battling to restrain local banks from attaching their farming equipment after they failed to repay loans advanced in 2009-10 season.
CBZ’s Karoi branch has taken nearly 50 farmers to court over unpaid loans advanced to them to fund working capital and purchase farm inputs three years ago.
However, the farmers most of whom were ‘’self-actors’’ are protesting the bank’s demands as unwarranted as they got the inputs late while some of the inputs were never delivered to them by the bank.
One of the farmers said CBZ turned the loans into overdrafts which became costly to them.
‘’CBZ was quick to sue farmers when they had breached the contract by not providing farmers with fertilizers especially Ammonium Nitrate that has been promised. CBZ issued us with vouchers when they knew they had not procured fertilizer’’ said James Mandeya, a farmer in Tengwe about 50 kilometers west of Karoi town.
According to some farmers, the CBZ vouchers were not redeemable anywhere except at the Grain Marketing Board that had no fertilizer for them but was selling only for cash at the time.
‘’I am surprised why CBZ is taking such drastic measures against us as we never got all inputs on time. I got part of the inputs in November after the rainy season and that was a loss for the majority of us’’ said Mhoidian Nyakambangwe, who is being sued for over $22 000.
‘’My vouchers specify that I got half of the amount of inputs charged here. My appeal is for the Government to intervene and save us. If they can write off rates in all councils why not assist us by offsetting the mounting debts’’ pleaded Nyakambangwe in an interview with Radio VOP held in Karoi.
Economist, Godfrey Kanyenze, founding Director of Labour and Economic Development Institute of Zimbabwe attributed the failure by farmers to repay loans as uncertainty in the farming sector.
“It is unfortunate that producer prices were determined during selling seasons but farmers could not plan to see if the crop they want is viable. The uncertainty within farming sector affects cash crop production. It is a challenge faced by those who want to sponsor farming ventures and it is risky” said Kanyenze.