The Zimbabwe Agricultural Development Trust (ZADT) was created on the 5th of October 2010 by SNV Netherlands Development Organisation and Humanistic Institute for Development Cooperation (Hivos) for the primary purpose of contributing to the recovery and improvement of the smallholder farming sector and improve the food security and incomes of rural households in Zimbabwe. It was born out of an analysis carried out by the Market Linkage Working Group (MLWG), a Zimbabwean multi-stakeholder platform concerned with promoting and improving market linkages with the smallholder farming sector. ZADT is a non profit oriented organisation.
It was established that many social and economic intervention schemes in Zimbabwe failed to have positive impact because of a number of factors including:
- Lack of focus on particular value creating economic activities or value chains,
- Lack of relevant management expertise
- Poor Creditworthiness of the target beneficiaries,
- Lack of in-built sustainability mechanisms.
Each of the above-stated factors, on their own or in combination with others, has often culminated in the exclusion of smallholder farmers and other SMEs from access to credit, even if it is specifically targeted at them.
Smallholder farmers and SMEs are generally perceived by financial institutions to be highly risky to provide loans . Related to that, the transaction costs associated with administering multiple small loans are often high relative to returns obtained. At the same time, most financial institutions prefer to operate in urban and peri-urban areas.
This has made it impossible for smallholder farmers and other small and medium enterprises (SMEs) to access credit to finance their agricultural activities in a country where 70% of the population, most of whom are women, derives livelihood from agriculture. The only access to credit that smallholder farmers (SHFs) currently enjoy is limited to contract farming schemes.
It is within this context that SNV, and Hivos established the Zimbabwe Agricultural Development Trust (ZADT) whose objectives are:
- To provide soft capital to value chain actors in which smallholder farmers meaningfully participate.
- To provide soft capital to financial services providers for lending to agricultural input and output value chain actors who ultimately benefit smallholder farmers.
In 2010 ZADT established it's first fund, the Credit for Agricultural Trade and Expansion (CREATE Fund) and has been providing loan capital to Finanncial Institutions that on-lend to value chain actors who have direct linkages with smallholder farmers.
The fund is for value chain actors operating under input, output and processing windows in the agricutural sectors. This is expected to lead to improved input supplies and market access for smallholder farmers thereby contributing to an increase in productivity, incomes, employment opportunities and ultimately improved livelihoods.