Zambia’s Smallholder Farmers Face Access to Finance Crisis Despite Government Support — Dr. Frank Kayula
The President of the National Association of Smallholder Farmers, Dr. Frank Kayula, has raised the alarm on the worsening financial access crisis affecting small-scale farmers across Zambia, despite several government-led efforts to ease credit flow into the agricultural sector.
Speaking at a recent stakeholder briefing, Dr. Kayula expressed deep concern over the reluctance of commercial banks to lend directly to full-time farmers, despite the existence of government-backed credit guarantee schemes. Instead, banks continue to favor salaried workers and intermediary institutions, thereby denying genuine smallholder farmers direct access to financial resources crucial for boosting production and productivity.
“It is unfortunate that despite government introducing credit guarantee funds to cushion banks, many financial institutions still choose to lend only to salaried individuals,” said Dr. Kayula. “This excludes the very farmers who need it most those dedicated full-time to agriculture.”
He further lamented that intermediaries entrusted with managing funds often divert them to non-farming ventures or part-time ‘briefcase’ farmers, undermining the purpose of financial inclusion initiatives.
Dr. Kayula also pointed out that this trend contradicts successful financial inclusion models seen in developed countries, where banks assess each smallholder enterprise on its own merit, rather than applying broad generalizations about risk.
“We want Zambian banks to stop putting all smallholder farmers in the same risky category. There are committed and productive farmers who simply need capital and support. Let’s make the loan facilities more accessible,” he urged.
Additionally, Dr. Kayula highlighted the dire state of Zambia’s soil health, citing declining organic matter as a major threat to sustainable agriculture. He called for a national soil mapping initiative to provide farmers with better data for informed decision-making, adding that improved soil management practices are long overdue.
“Many of our farmers are still using outdated farming practices passed down from their great-grandparents. These are not effective. We need a shift to scientifically proven methods to restore productivity,” he emphasized.
On the pricing front, Dr. Kayula revealed that most maize on the market is currently fetching under K200 per 50kg bag — a figure far below the break-even threshold for farmers.
“From our analysis, farmers need to sell maize at a minimum of K380 per 50kg bag just to break even. Anything below that is a loss. We are therefore recommending a fair price of at least K400,” he stated.
He urged farmers not to succumb to desperation and sell their produce at throwaway prices, but rather to practice patience and diversify into other value streams while waiting for favorable market conditions.
“Don’t be pressured into selling at ridiculously low prices. Learn to be patient. Diversify your income sources so you’re not forced to sell when the market is down,” advised Dr. Kayula.
The National Association of Smallholder Farmers plans to issue formal recommendations to the Food Reserve Agency (FRA) and other stakeholders, pushing for price adjustments and policy reforms that truly empower Zambian farmers.
May 24, 2025
©️ KUMWESU
Mr. Kayula Zambians will continue to struggle in this regard. Why wants to risk pour money into an unsecured lender?
How many loans or just FSIP granted to people who should have graduated from it and claim to be small scale farmers? How many Co-operatives collect contributions and lie to some of their members that they didnt qualify for the packs; in the mean time, they have collected and gauge fertilizer for themselves.
The credit rating agency was established for a reason. A highly under utilised institution that defaulters of loans can be reported and financial institutions can establish who is worth giving a loan to and is not.
We have also recently read of CDF defaulters. Are they beingreported to this agency?
Too often like FSIP we have failed to apply rules for fear of Political retribution/fall out.
Well the same failure is the reason so much money has been spent on the wrong reasons and donors are fatigued so they are pulling out.
When we stand in the mirror and assess why we look the way we look; lets not lie to ourselves that we are nicely dressed when our clothes are in tatters. Sometimes citizens dont understand cause poltical parties use that as a basis to lie that they can when they seriously know government is walking around with holes in its pockets while lining their personal pockets at the expense of the very vulnerable they promised to workhard for.