DevPact assessed the employment effects of agricultural outgrower schemes in Zimbabwe
This project entailed a review of the employment effects of the Africa Agriculture and Trade Investment Fund (AATIF) financing through commercial bank lending in Zimbabwe, specifically analysing the outgrower model with a leading agribusiness company in Zimbabwe. In this arrangement, medium-sized farmers accessed credit from the commercial bank to invest in their farming operations. The private agribusiness acted as a buyer of the crops and had a relationship with the bank, whereby it repaid agreed installments of the loans back to the bank directly from the proceeds due to farmers. The farmers received their payments after the loans had been paid. The risk reduction resulting from this arrangement enabled the bank to extend credit to farmers in the difficult economic context in Zimbabwe at the time. DevPact led consultations with the ILO, the commercial bank, and the farmers to assess the employment effects brought about by the AATIF funds and recommendations for replication in other geographies.
Partner: ILO
