Finance and Economic Development Minister Professor Mthuli Ncube has said that the government is open to renegotiating with banks to make 99-year leases acceptable to financial institutions. Banks were refusing to accept the use of leases as collateral citing that they are not transferrable.
Earlier, Dr. John Mangudya, the Reserve Bank of Zimbabwe (RBZ) Governor claimed that banks have agreed to accept 99-year leases as collateral after Government tweaked the leases to be transferable and bankable. The claim was proved to be untrue in Parliament where the finance minister was responding to questions.
Ncube dismissed allegations that 99year leases were unbankable noting that small-scale farmers prior to Independence used to have leases that were bankable. He said:
This is not correct that leases are not bankable. There must be something in some of the clauses in the 99-year leases which I am not aware of which is making them unbankable.
I think that the issue of the content of these leases is not closed. If there are issues that need to be renegotiated and better understood by the financial institutions, that avenue is still open. We have to fine-tune it to a level where they are acceptable to financial institutions.
Ncube added that banks could securitise the crops for farmers who need credit facilities. In that case, as Ncube noted, the 99-year lease would be unnecessary.
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