Leonard Ncube, Victoria Falls Reporter
MICRO-FINANCE institutions (MFIs) have expressed readiness to partner Government in financing capital projects in the country.
Zimbabwe Association for Microfinance Institutions executive director, Mr Godfrey Chitambo, told Business Chronicle on the side lines of the first Green Investment catalyst round table in Victoria Falls that their members felt side-lined over the years yet they have the capacity to finance big projects.
With 186 members, five of which have reached bank status as they now take deposits, Mr Chitambo said MFIs deserve participation in major capital projects.
“We want to be included in planning. We were interested in funding Command Agriculture but the business model put across to us was not clear. We are not saying we can do projects like Batoka but we can do solar projects and others,” said Mr Chitambo.
“As a micro finance sector, we are a legally constituted sector under the Micro Finance Act Chapter 24.29 and Act of Parliament as well as regulated by the Reserve Bank. We had a greening conference in 2013 and then we thought it was time we showed responsibility but no one was looking at us.”
Mr Chitando, who had earlier addressed financiers, bankers, environmentalists and project managers attending the two-day conference, said as much as their core business was to make money, MFIs have a social face hence they can do community projects.
He said some of the MFIs that take deposits like mainstream banks include Afro Capital, Get Bucks, Lion Success as well as the Women’s Bank.
“The largest MFI has a total amount of $31.1 million at its disposal, which it can lend out and command 29 percent of the market with the next one worth $20 million and all have the capacity to invest in the Green Bonds,” said Mr Chitambo.
He, however, said MFIs were crippled by the nature of their licences whose lifespan was only one year hence they struggle to get long term partners. Mr Chitambo said they have been engaging Government over the years and were worried about the slow pace in addressing their issues.
“The Micro Finance Act gives us a one year licence and this gives us a major problem of confidence. Most of our members get money from the Zimbabwe Wholesale Fund for up to three years but their licences are for one year hence they face challenges,” said Mr Chitambo.
He said while something is being done about the issue, it was the pace that is worrying the sector.
“We are agreeable with everyone that the one-year licence does not make sense but the problem is bureaucratic issues. The process is taking too long and we think it can be expedited because this is stifling our innovation,” said Mr Chitambo.
He implored the Ministry of Finance and Economic Development to speed up the process before the current Parliament term ends, saying failure to do so would mean starting afresh the whole engagements process with a new Parliament.
MFIs are advocating for an open ended licence tenure or one renewable after three or five years. — @ncubeleon.