Mi­cro-fi­nance fund closes 2018 be­low tar­get

Chronicle (Zimbabwe) - - Front Page - Oliver Kazunga

THE Zim­babwe Microfinance Fund (ZMF) closed 2018 with a loan port­fo­lio amount of $12,3 mil­lion for on-lend­ing to microfinance in­sti­tu­tions against a tar­get of $14 mil­lion.

ZMF man­ag­ing di­rec­tor Mr Brian Zimunhu said the pro­jected port­fo­lio was missed due to low util­i­sa­tion of credit lines in the microfinance sec­tor.

“In 2018, we closed the year with a port­fo­lio of $12,3 mil­lion but our port­fo­lio tar­get for the year was $14 mil­lion,” he said.

This year ZMF tar­gets to grow its port­fo­lio to $17 mil­lion sup­ported by money flow­ing into the sec­tor com­ing from the fund and other fun­ders. Mr Zimunhu said as a fund­ing in­sti­tu­tion, his or­gan­i­sa­tion this year also looks for­ward to help­ing MFIs grow their bal­ance sheets so that they be­come at­trac­tive to lo­cal cap­i­tal mar­kets.

“I know there are a num­ber of MFI play­ers now that are rais­ing money through is­suance of debt in­stru­ments. The rea­son why peo­ple are now will­ing to in­vest in those debt in­stru­ments is be­cause we would have helped our MFIs to de­velop and grow strong bal­ance sheets and this gives con­fi­dence to in­vestors,” said Mr Zimunhu.

He said they would also look at var­i­ous fund­ing in­stru­ments that will en­able MFIs to play a more mean­ing­ful role in driv­ing the na­tional fi­nan­cial in­clu­sion agenda for­ward.

Mr Zimunhu said when they set the $14 mil­lion port­fo­lio tar­get for last year, it was en­vis­aged there would be a sig­nif­i­cant util­i­sa­tion of the credit lines man­aged by ZMF from the Re­serve Bank of Zim­babwe. How­ever, he said util­i­sa­tion of the fa­cil­i­ties from the Cen­tral Bank was a bit low.

“I think in terms of the loans we have been able to dis­burse dur­ing the year, we dis­bursed close to $8 mil­lion but of course some of the money has since come back and we are al­ready dis­burs­ing it.

“When we set the tar­get at the end of 2017, we en­vis­aged that they will be in­creased util­i­sa­tion of the lines of credit we are man­ag­ing from the RBZ but it was a bit low . . . that’s ex­actly why we could not at­tain our tar­get,” he said.

From the microfinance per­spec­tive, Mr Zimunhu said the Apex bank has sev­eral em­pow­er­ment funds where banks were dis­burs­ing some of the funds. Con­se­quently, he said some of the po­ten­tial bor­row­ers were now ac­cess­ing the re­sources un­der the RBZ fa­cil­i­ties through re­spec­tive banks.

“And lately, what we have agreed with RBZ is that all credit-only microfinance in­sti­tu­tions should ac­cess those funds through ZMF,” he said.

Cen­tral bank fund­ing fa­cil­i­ties in­clude the $200 mil­lion ex­port fi­nance fa­cil­ity, women em­pow­er­ment fund ($15 mil­lion), busi­ness link­age fa­cil­ity ($10 mil­lion), microfinance re­volv­ing fa­cil­ity ($10 mil­lion) and the tourism sup­port fa­cil­ity ($15 mil­lion). Com­ment­ing on the im­pact of the two per­cent tax on MFIs op­er­a­tions, Mr Zimunhu said:

“The two per­cent tax be­ing charged on all elec­tronic pay­ments has in­creased the cost of do­ing busi­ness to the MFIs. We will soon en­gage mone­tary and fis­cal au­thor­i­ties over the two per­cent tax be­cause we un­der­stand that trans­ac­tions by banks have been ex­empt from the tax,” said Mr Zimunhu.

In Oc­to­ber, Trea­sury an­nounced up­per and lower lim­its for the In­ter­me­di­ary Money Trans­fer Tax as part of the broader fis­cal sta­bil­i­sa­tion mea­sures. — @okazunga.

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