intended projects. Loans for a dairy project by a cooperative, for instance, will
take the form of direct payments to building contractors, equipment suppliers and
dairy cow suppliers and/or insurance companies.
7. Cooperative sanctions on members : Cooperatives repossess dairy animals and
equipment from members who side-sell their milk. Cooperative sanctions are also
administered by cooperatives involved in other production projects such as coffee,
fresh vegetables, fish farming and honey.
8. Organizational and business development services : ZATAC has a developmental
focus, often helping build the organizational and leadership capacity of new
borrower cooperatives even before the loans are disbursed. Training is given to all
cooperative members to build collective consciousness among members towards
resource pooling and collective marketing in order take advantage of economies
of scale and lower transaction costs. Identification of new business opportunities
for investment by the cooperatives is an integral part of the ZATAC model for
smallholder commercialization and dynamic incentives formulation. Business and
technical skills training are also given to members of borrower cooperatives.
Technical skills include production, quality control and quality assurance systems
while business skills range from basic bookkeeping, farm budgeting,
markets/marketing to financial management.
9. Loans to large agribusiness companies : ZATAC provides a substantial portion of
loan funds to larger and more established agribusinesses, especially agro-
processors and exporters, who provide markets and sometimes other additional
services to smallholder cooperatives. Common uses of such loan funds by the
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