Zamfi aims to fill the financing gap of the marginalised left by banks

THE Zimbabwe Association of Microfinance Institutions (Zamfi) chairperson Saul Chin’anga says they are aiming to reach the rural people and the marginalised with financing opportunities to close the gap left by the banks. The gap was created when banks reduced the amount of lending, owing to the uncertainty on whether the greenback will still be in use after 2030, the year its usage will expire.

Zamfi is currently the sole association of microfinance institutions in Zimbabwe that seeks to provide lending for smaller financing packages.

In an interview, Chin’anga said they aimed to reach rural people and the marginalised given how banks had taken a backseat.

“In terms of our structure loans, we are looking at those who are in rural areas, those who are marginalised, those who are normally left out,” he said.

“If you look at our banks now, they have moved out from those areas such your Honde Valley, Checheche, Nembudziya, and Mt Darwin etc. But, the role of microfinance now is to go to those places to service them and close that gap left by the banks. That’s the structure and role of our industry.”

In terms of development, rural areas suffer from slow or lack of developmental support from either government or investors who typically support urban areas.

Thus, the rural areas have been largely left underdeveloped.

Chin’anga said Zamfi as a structure played an important role to give direction to its members in providing micro-lending.

“And as Zamfi, what we are doing is to encourage our members to go in that direction because we are the board that represents microfinance and we help them with where to go in terms of direction. This (supporting rural areas) is the direction we want our members to focus on,” he said.

About the structure loans, Chin’anga said the players differ from one to another and gave loans to different types of people or categories.

“But, if you are talking about the structure of the loan, as you have seen here, our players give loans to SMEs (small to medium enterprises), to youths, and to women. We give loans for agriculture, for productive loans,” the Zamfi boss said.

“If you listen to my speech, I said the awards that we are giving relate to the pillars that microfinance is playing into. So, you find that we are looking at the most rural outlets. What does that speak to? It speaks to the fact that the microfinance industry must reach out to the rural for it to have financial inclusion.”

The Zamfi chairman said that some players were still taking livestock as collateral which was good, as most rural areas rely on livestock farming.

“So, some of our players have started going into that space where they are accepting livestock in a collateral security. Now, it's not everyone who is accepting, but it's a direction that we are trying to push into. Where we unlock value, some reports say that the value of livestock in Zimbabwe is about US$3 billion,” Chin’anga said.

“Now, if we can unlock that value, we can give loans to the rural people because to us that is their capital. So, if we can reach out and make sure that part of that capital is working, we will be very happy. So not many institutions have gone into that space, but we are very proud of those few that have already started going in that direction.”