VICE-PRESIDENT Inonge Wina says government is aware of the challenges being faced by small-scale farmers and SMEs in accessing finance is due to lack of certifiable collateral.
She said this in a speech delivered on her behalf by finance minister Bwalya Ng’andu during the launch of LuSE commodity market at the Radisson Blu Hotel in Lusaka yesterday.
Vice-President Wina explained that the LuSE Commodity Marker was a joint effort between the Lusaka Securities Exchange (LuSE) and the Zambia Commodity Exchange (ZAMACE) in conjunction with the Musika initiatives Zambia.
“This development is particularly significant in view of the fact that the agricultural sector continues to be one of the priority drivers of the Zambian economy. Accordingly, government is committed to supporting various initiatives, such as this one which are aimed at growing this sector,” she said.
The Vice-President said it was also encouraging that the initiative was being driven by the private sector with a view of contributing to the resilience of the economy.
“As we work towards achieving greater diversification of this economy, government will continue to value partnerships between itself and the private sector as well as partnerships among private sector players themselves as exemplified by the partnership between LuSE and ZAMACE in the development the commodities market,” she said.
Vice-President Wina observed that initiatives such as the LuSE Commodity Market had the potential to contribute to enhanced agricultural production which would respond to increased demand for food occasioned by rapid population growth.
“Government is aware of some of the challenges being faced by the small-scale farmers and SMEs in accessing finance is due to lack of certifiable collateral,” she said. “Using the warehouse receipt as collateral through the Commodity Market initiative will provide farmers with some leverage to access various forms of finance such as a bank loan.
The warehouse receipts can be traded over various financial institutions including LuSE will provide a structured, transparent and efficient mechanism to drive trade within Zambia and abroad. This is what underscores the significance of today’s launch.”
Vice-President Wina said the warehouse receipt system was also an opportunity for financial institutions to provide the much needed solutions for grain marketing and to create innovative instruments in conjunction with the LuSE for secondary trading.
“I would, therefore, like to implore all the financial institutions to engage LuSE and recommend measures and financial products for a robust commodities market specifically in the production and marketing of agricultural commodities through the LuSE- ZAMACE partnership,” said Vice-President Wina.