‘Clients won’t pay money lenders’

Molline Gagare Business Reporter
THE Zimbabwe Micro Finance Wholesale Facility Trust (ZMFWF) is under distress owing to an increase in “wilful default” in loan repayment by clients, managing director, Brian Zimunhu said.Speaking on the sidelines of a handing over of certificates to players in the sector after a 10-day workshop in Bulawayo on Friday, Zimunhu said micro-finance institutions need to come up with viable solutions to prevent repayment default as this was costing the industry millions of dollars.

“A lot of clients who come and borrow money from the institutions aren’t faithful in terms of returning what they’ve borrowed. Most of them return the money in the first few months to gain the trust of the institutions.

“Once this is done, they’ll borrow a larger amount knowing fully well they’re not able to return the funds. These clients then disappear,” he said.

Zimunhu said credit reference or Bureau De Change should be put in place to adequately screen clients.

He said part of the course was aimed at equipping micro-finance players with skills to assess viable and non viable clients.

“Practitioners must have adequate skills to identify fraudsters. This will reduce the risk of losing millions of dollars to untrustworthy clients who swindle microfinance institutions,” said Zimunhu.

He said some of the challenges faced by the microfinance institutions include liquidity challenges and none performing loans.

ZMFWF has set a target of $12 million loan disbursement this year compared to the $6,7 million it disbursed to micro finance institutions last year.

Since its inception in 2012, the Zimbabwe Microfinance Wholesale Facility has played a critical role on the MFIs sector through providing on-lending to Zamfi members with interest rates ranging between eight percent and 13 percent per annum.

Economic analysts have, however, expressed concern that the bulk of loans disbursed have been channelled towards consumption instead of production.

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