The in-field investigation was conducted (in the Lusaka and Copperbelt Provinces of Zambia) in accordance with a pre-set check list of the issues generally involved in the design of any new credit facility of the type envisaged. Only the key issues will be presented here, as being particularly pertinent to the Zambian situation. These issues involved, primarily:
assessing the potential demand for fish-farming credit
finding ways and means to meet such demand under current Zambian conditions
defining the adequate marketing outlets for the fish to be produced.
Demand for fish-farming credit in Zambia
No thorough survey of the demand for credit for fish-farming purposes could be properly undertaken during the short-term time-span of the consultant's stay in Zambia.
Most of the evidence gathered by him on this subject was based on:
the requests for credit recorded by the FAO Project Management and officers based in Chilanga
a meeting with 25 potential fish-farmers, organized at Nyemba (west of Lusaka) under the auspices of the local UNIP Ward Chairman
individual and collective interviews of newly established fish-farmers in the Lusaka and the Copperbelt Provinces.
Since the existence of a (solvent) demand for fish-farming credit in Zambia is the obvious premise on which this whole study is based, such demand must simply be postulated at this stage.
However, the useful methodological distinction between the need for credit and the actual demand for it - a distinction equally cherished by micro-economists and marketing experts - must be kept in mind throughout.
AN INVENTORY OF THE POTENTIAL SUPPLIERS OF FISH-FARMING CREDIT
As an initial step towards the ultimate definition of the ways and means through which the postulated demand for fish credit could be met, the consultant, with the assistance of the FAO Project Management, identified and inventoried the various possible sources of such credit in Zambia. This inventory had to be exhaustive before a reasonable pre-selection could be made.
Conceivably the credit for fish-farming could be supplied through any of the following channels (exclusively or in combination):
| Possible Credit Channels | Name in Zambia |
| A FISH FARMING PROJECT organizational structure or, alternatively, the FISH-FARMING COMPONENT of a larger, multi-purpose project organization | The FAO/GRZ Fish Culture Development Project (Chilanga, Chipata and Mwekera) |
| The Eastern Province Agricultural Development (EPAD) Project and its cooperative Credit Unit (World Bank) | |
| The Refugee Malnutrition Relief Project (UNHCR) in the North Western Province | |
| A grassroot, rural-based, VOLUNTEER ORGANIZATION | NORAD (?) in the Northern Province |
| A village-based COMMUNITY DEVELOPMENT PROGRAMME | Village Industry Service (a GRZ-sponsored independent trust) |
| The GRZ's Department of Fisheries extension service | Links to the FAO/GRZ Project (see above) |
| Credit institutions within the COOPERATIVE SYSTEM | CUSA, FSL |
| Parastatal DEVELOPMENT FINANCE INSTITUTIONS | AFC + ZADB = the new Lima Bank |
| DBZ | |
| COMMERCIAL BANKS with branches in the appropriate locations | Barclays Bank and ZNCB (branches in Lusaka, Chipata, Kitwe) |
| BUSINESS ORGANIZATIONS with a commercial network (of agents) in the targeted rural areas | Unidentified |
This rather exhaustive inventory of possible credit channels has lead to a short list of workable solutions, namely:
to let the revolving credit fund be operated by the FAO/GRZ project management; the total amount available for lending is then $US 50 000;
to have the $US 50 000 fund (possibly minus a compensating amount for the difference between administrative costs and interest charges) administered by FSL, allowing the cooperative finance institutions to apply current rules and procedures for processing the loan applications (each of which would have to be cleared with the FAO project staff for appraisal of the applicant and of the fish-farming operation planned);
to channel the $US 50 000 fund through the new Lima Bank and have this institution apply specific, ad hoc rules and procedures, interest rate, and other credit terms, spelled out by FAO, in the administration of the scheme (with the same provisos as above regarding the appraisal by FAO of the applicant and of his proposed operation);
to let the new Lima Bank operate the credit scheme on its own funds, in accordance with its forthcoming rules, regulations and charges, in exchange for the use of the $US 50 000 Netherlands grant for the purpose of strengthening the institution, in terms of training (for the credit officers involved in the scheme) and of other extension facilities which may be subsequently required;
to use the $US 50 000 grant as a risk fund/insurance against (at least as proportion of) future defaults (credit guarantee provided by the project) and to have a commercial bank (Barclays or ZNCB) operate the credit scheme in accordance with its current rules, procedures and charges (with, again, the same provisos as above concerning the screening of the applicant and of his proposed operation by FAO);
to provide all the extension facilities (beginning with training of specialized credit officer) required by an agreeable commercial bank (Barclays or ZNCB), ready to subsequently operate the credit scheme on its own funds, under the Credit Guarantee agreement with BOZ;
any workable combination of the above solutions.
Each of the above “package” solutions was then assessed with respect to its pros and cons and the result of this sifting through process is presented (see page 14) in a synoptic form.
Final Alternatives
Finally, the critical selection method adopted here “zeros in” on the Lima Bank and FSL alternative. These institutions have been approached with a draft agreement for the joint operation of the scheme. The purpose was to keep in reserve a “fall-back” solution in case of refusal by either institution.
It is assumed here that the bulk of the fish produced will be bought on site, i.e., by people coming to the farm on harvest days.
The initial Netherlands fund amounts to $US 50 000 or ca K 400 000 at the current exchange rate. Given an average investment of K 2 500 per ziba pond and each loanee having 4–5 ponds, 40 to 50 loans could be made under the scheme, in each area around the three stations of Chilanga, Chipata and Mwekera.
