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sugarcane farmers struggle to repay loans

Business Section

By LINDA JELE - SWAZI TIMES-01-Sep-2009

MALIBENI – Seven years later, some sugarcane farmers’ associations have still not finished repaying their loans because of the ever increasing interest on loans.

Some of these farmers have said they regretted falling for the idea of venturing into sugarcane farming. One of the disgruntled associations is Bambanani Malibeni Farmers Association in the Lubombo region, which has about 108 members with 219 hectares of land on which they produce sugarcane. Most of these farmers used to produce cotton on the land before being lured by profits in the sugarcane production industry.

The farmers told SwaziBank Board of Directors and management about this problem, during their tour of projects financed by the bank last week. They claimed because of the high interest on loans, they ended up sharing as little as E1 000 among themselves after the harvesting season.

One of the members of the association, identified as Dlamini, told the board that they had become very poor because the dividends they had been receiving were insufficient to cater for their daily family needs.

Lucrative

“The Swaziland Water and Agricultural Development Enterprise (SWADE) (formerly SKPE) lured us into this venture with lucrative promises. For instance, we were told that after harvesting, the members would share 50 per cent of the profits and the other would repay the loans, but it has never been the case. I used to grow cotton on my fields and was able to purchase three cattle per year and further pay school fees for my children,” he said.

He said the association borrowed E11 million from the bank about seven years ago and they were still repaying the loan. Dlamini said when SWADE came to help them start the businesses, it brought with it banks, from which they would borrow money.

“We have been made poorer and we cannot support our children with the little dividends we get here,” he said. In response, SwaziBank Managing Director Stanley Matsebula said the loans were escalated by the fact that when the projects began, associations hired South African companies to clear land and install pipe systems, which charged exorbitant fees. He said on some instances, the banks had to pay SA companies over E4 million for the ground work, on behalf of the associations.

Finance

“The Government of Swaziland was supposed to help you with bush clearing, however, it did not and we had to finance that too. We sometimes did not pay for other associations because they had submitted exorbitant charges for doing bush clearing only. Some associations had over E8 million debts before even beginning planting,” he said. He said that was the reason government offered the E89 million rebates for the farmers to develop their infrastructure. Matsebula added that some associations would use the money to pay off their loans with the bank and then be able to enjoy dividends.


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