42. The Zambia National Commercial Bank has a long experience of loan provision to the agricultural sector but unfavourable environmental, economic and climatic conditions have affected its agricultural credit performance. The bank has supported commercial crocodile farming activities (skins and meat) for export markets. Performance in this sector has been satisfactory and the Bank is currently considering applications for the construction of fish ponds and purchase of fingerlings, offering a new line of credit for smallholders and disadvantaged groups, under the Zambia Agricultural Marketing, Processing and Infrastructure Project of the Agricultural Sector Investment Program. Under this project, fish farming and aquaculture are eligible activities for credit, entrepreneurs from the Eastern Province will be targeted for short to medium term loans. Adequate training and support will be provided and group borrowing will be encouraged.
43. To be considered for credit, it is a requirement that all credit applications are channelled through Branches where prospective borrowers maintain active business accounts. Documents required for submission of credit applications include:
44. Credit assessment to determine risks and identify the repayment capacity involves using reliable up-to-date general business and financial information with verification of:
the amount and purpose for which the loan is required;
the honesty and integrity of applicants and their borrowing track-record. Customers' experience in this line of business will also be taken into consideration;
the Bank's protection in terms of realizable value of security (collateral) held or offered (tangible security such as landed property (residential) is considered ideal by the Bank; the accepted form of security will be considered as a secondary source of repayment);
the repayment and tenure of credit facilities, which range from twelve to thirty six months.
45. The Bank is willing to consider credit facilities to support the development of commercial aquaculture provided that business proposals meet the Bank's lending criteria. It is suggested that the government introduce incentives such as favourable interest rates to stimulate borrowing for aquaculture activities and establish, in partnership with other agencies such as the Ministry of Agriculture and Co-operatives, the World Bank and the African Development Bank, lines of credit specific to the aquaculture sector easily accessible by borrowers country-wide through participating financial institutions and commercial banks.