An assessment of Zambia National Framers Union Lima Credit Scheme
Date
2014
Authors
Phiri, Pangela
Journal Title
Journal ISSN
Volume Title
Publisher
University of Zambia
Abstract
Zambia's market for agricultural finance is challenged, from the farmers' perspective,
credit is scarce and expensive and heavily skewed towards the larger, corporate sector.
Banks on the other hand, are reluctant to lend without very high collateral coverage and a
high risk premium. The LIMA credit scheme recognises the importance to bridge the gap
between agricultural finance and small scale farmers. This scheme originated from a need of
credit services expressed by ZNFU members. The LIMA scheme was developed in-house
by the ZNFU in close consultation with its commercial financial partner Zambia National
Cooperative Company PLC and other private sector stakeholders. The main objective of the
study is to assess the model being applied by ZNFU to facilitate access to credit to smallholders
farmers in Zambia and analyse the benefits that are accruing to the small-holder
famers. The study was conducted in Chongwe. It used a Semi-structured questionnaire on
randomly sampled LIMA beneficiaries. The data was analysed using Special Package for
Social Scientists. The survey results revealed that beneficiaries of the LIMA Scheme showed
an improvement in income generated from farming activities. There was also significant
increase in the number of farmers that are currently on the LIMA program (from 250-4026).
The research also revealed that this package is achieving its set objectives which is to provide
small-scale farmers with agricultural services based on group Savings and Loans approach
linked to the commercial sector. The assessment highly recommends that the program should
be more transparent as the farmers knew little about the whole program. For the scheme to
continue targeting more farmers it should include more farmers needs such as herbicides, and
farming implements and extension services.
Description
Student Project Report
Keywords
Agricultural credit-Zambia