ZADT Revolving Fund

ZADT now administers its Funds directly as co-investments to eligible Zimbabwean agricultural value chain actors or agribusiness entities who have commercial linkages with smallholder farmers. Previously ZADT disbursements were channeled through financial institutions comprising of commercial banks and microfinance institutions.

The Fund which stood at US$38.5 million at peak in 2018 currently (December 2024) stands at an equivalent of US$10,626,615.00 million. The loss was attributed to monetary policy changes in 2019. The Fund is made up of contributions from four international development organizations. The Fund is a revolving facility which is disbursed as co-investments to eligible agribusinesses. Co-investments are done with the objective of ensuring preservation of the Fund. ZADT does not disburse any grants from its Fund.

Eligibility Criteria

The target market for the ZADT Fund are Agribusinesses and SME whose activities benefit smallholder farmers. The agribusinesses and SMEs should demonstrate clear commercial linkages and benefits to smallholder farmers in eligible value chains. These include but not limited to; Agro-dealers, Traders, Agri-Processors, Agri-Contracting Corporates, Agri-Input, Equipment manufacturers/Distributors and other actors.

Smallholder Farmer – Eligible smallholder farmers are those farmers that live in rural or communal areas and those operating in peri-urban areas of Zimbabwe. Qualifying smallholder farmers are those engaged in commercially viable and sustainable agricultural activities in eligible value chains.

Agro-Dealer – The agro-dealer is often a community-based retailer of various agricultural inputs such as fertilizers, seed, implements, tools as well as grocery items. Smallholder farmers purchase some of their inputs and household needs from agro-dealers and they also sometimes sell their produce through the agro-dealers.

Trader – The trader is the physical link between the smallholder farmer and the market. This value chain actor travels to smallholder farming areas where he/she buys produce for resale in urban or other rural areas.

Transporter – The transporter provides the means for moving a product or inputs from where they are grown, sold or manufactured to where they are consumed.

Input Manufacturers – These manufacture agricultural inputs such as fertilizers, pesticides, herbicides, agricultural tools and equipment and others. They normally access the Fund under the Inputs Window.

Processors – Processors buy produce from traders and/or directly from smallholder farmers for the purpose of adding value. The end product is sold to urban and rural consumers or even exported.

Wholesalers – Wholesalers are the intermediaries between the manufacturer of inputs and the agro-dealers. They buy stock from manufacturers in bulk and then re-sell to agro-dealers. Wholesalers may also purchase produce from farmers and or agro-dealers for trading.

Contracting Companies – The contracting company may be a limited liability company, a partnership or sole proprietor who contracts smallholder farmers so that they may produce a particular crop in return for inputs, cash and extension services. The contractor undertakes to purchase all or part of the smallholder farmer’s produce.

ZADT Focus is on financial inclusion and gender mainstreaming in its product offering, promoting women, youth and green growth initiatives.

Excluded and Ineligible value chain activities and actors include;

Tobacco, Non-organic Cotton value chains and operations in Contested Land
Projects or activities non-compliant with anti-money laundering laws
Projects that finance or promote terrorism
Projects or activities that are non-compliant with regulatory requirements and policies

How to access ZADT investment

There are basically two ways in which ZADT finance can be accessed. First, ZADT through its Investments Development can approach eligible agribusinesses to discuss prospects for funding. The other way is through the eligible agribusinesses approaching ZADT on their own to initiate discussions for funding.

In general the step by step guideline for Agribusinesses to access ZADT funding includes the following;

Agribusiness determines its financing requirements by carrying out a strategic and financial analysis of the business and present the information in a logical structure or in a business plan format. The business plan should include detailed historical financial records and projections of the business.
Fill in a ZADT Application Form for Co-Investment support. The Application Form can be downloaded from the ZADT Website or obtained from the ZADT Offices
Submit the completed application form together with the business plan write up that demonstrates the business linkage and benefits accruing to linked small holder farmers as well as the financial projections.
ZADT will respond within five (5) working days advising on way forward.

A strong and demonstrable link and benefits to smallholder farmers is necessary before an application can be considered for funding. Successful applications will therefore be those which demonstrate a strong commitment to the business as evidenced by the extent of benefits accruing to smallholder farmers and the risk mitigatory measures in place.

Product terms and conditions

ZADT does not provide grants. Financial products that are offered in the form of Co-Investments and Equity are Working Capital and Capital Expenditure. These investments are repaid according to terms and conditions that will be agreed between ZADT as the Investor and the Agribusiness/SME as the Investee.

Working Capital

Investments in working capital are made to bridge gaps between collection of accounts receivable and payments of accounts payable or in a seasonal business to cover periods of low cashflow activity. Eligible Agribusinesses/SMEs are those engaged in commercially viable and sustainable agricultural activities benefitting smallholder farmers. This includes businesses which promote clean energy technology adaptation and those promoting adoption of climate smart agribusiness practices.

There are no set Investment limits as this will depend on specific project requirements as presented in the business plan. In general Investments in Working Capital are for a period of up to twelve (12) months. However, consideration is given to the gestation period of the funded commodity to align the funding requirements.

Capital Expenditure

Investments in capital expenditure are made to enable agribusinesses to acquire, upgrade and maintain physical assets such as farm or industrial machinery, equipment, property and/or industrial buildings. Eligible Agribusinesses/SMEs are the same as those indicated for working capital investment with an investment horizon of up to thirty-six (36) months.