Micro-finance fund closes 2018 below target
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.