Launched in Morogoro last week by Agriculture Minister Prof Adolf Mkenda, Kizimba Business Model is an entrepreneurial approach in agriculture sector development where a block of land is developed with all necessary infrastructure and facilities divided into small units called Kizimba (separate unit) and leased or transferred to individual farmers.
Speaking at the launch which took place at the Sokoine University Graduate Entrepreneurs Cooperative (SUGECO) grounds on Tuesday, the minister said the model is a game changer as it eases access to credit—the hitherto bottleneck to venturing into agriculture and agribusiness.
“We call upon financial institutions to create enabling environment for youth to access to credit facilities through Kizimba Business Model which guarantees increased production and productivity,” he said.
He said the ministry will continue working with SUGECO in various areas such as building and strengthening irrigation infrastructures, ensuring availability of agricultural input and extension advisory services to increase productivity.
The minister commended SUGECO for offering opportunities to young graduates to learn practical skills and training on how to start their own businesses.
"Agriculture contributes 28 per cent to GDP which is equivalent to one third while more than three-thirds of the national workforce is engaged in agriculture and this clearly shows that the contribution of agriculture is very small compared to the number of people engaged in agriculture," he said.
Explaining on the model and how it works, Executive Director of SUGECO Revocatus Kimario said the approach has its origins in the local government authorities whereby business structures are built with necessary infrastructure and divided into units.
According to Kimario, the model identifies the off-takers to guarantee the market for the produce or product within the blocks. This results in uniform quality, reliable supply, farmer empowerment in price negotiation, and overall competitiveness of the sector. A Kizimba block is composed of individual entrepreneurs operating as a cluster.
Following Kizimba success in the business sector, it is hoped that the model will work efficiently in agriculture sector.
The director said Kizimba Business Model will be established through build and transfer, build and lease, build, lease and transfer and finally build and operate.
He said the model comes with assured markets, inclusive resource mobilization for agriculture development, and better lending environment for both commercial and development banks.
“We believe that Kizimba business model will create skills and employment for the youth. It also generates revenues for local government authorities. The most innovative part of it is to connect all actors in the ecosystem to support agriculture,” he said.
The model targets all Tanzanians but most important the youth and women so that they can invest in the sector, generate income, create employment and support industrialization drive.
Vice Chancellor of Sokoine University of Agriculture Prof Raphael Chibunda said the institution will continue working with the Ministry of Agriculture in efforts aimed at transforming agriculture from subsistence farming to thriving and profitable agribusinesses.
He said the university has managed to establish agribusiness farms around the institution.
Speaking at the event, Cuso Tanzania Country Representative Romanus Mtung’e said the organization has partnered in the initiative to support SUGECO reach many young farmers on agribusiness for creation of competent human resource relevant to market demand.
He said Cuso facilitated the mapping exercises of farms to create blocks which are now ready for distribution to targets groups under lease and transfer system.
Kizimba business model is a real estate business approach in agriculture and agribusiness development that originates from local government authority’s business infrastructure and facilities development.
This initiative adopted the same approach used to establish block farming for specific value chains. The model is adopted as innovative financial products best fit in agricultural and agribusiness value chains development under partnership between Cuso International and SUGECO.
The plan targets two crops first which are mangoes and beans business value chains opportunities because the initiative has identified market demand and off-takers and has the projected investment and employment opportunities.
The approach’s value preposition includes to ensure youth and women employment, increased farmers’ connection to global value chain, enhance contribution of agriculture to the national GDP, and enhance stable and inclusive economic growth and substitution of importation of industrial raw materials.
Funded by the government of Canada through Global Affairs Canada, Cuso International is implementing a seven year "SHARE" programme, an initiative that aims to enhance the performance of local Tanzania partners to deliver more inclusive, innovative, and environmentally sustainable development initiatives.
In December 2020, Cuso International signed a partnership agreement with SUGECO, a youth and agribusiness incubator established since 2011 to promote youth and women engagement in agriculture and agribusiness value chains that enhances skills development, technology transfer and provision of space for innovation ecosystem to bridge agribusiness skills gap in Tanzania.