Oliver Kazunga, Senior Business Reporter
THE Zimbabwe Microfinance Fund targets to grow cumulative loan disbursement to microfinance institutions (MFIs) to $18 million this year up from $11,2 million in 2015.
Last year, the microfinance fund targeted a cumulative loan disbursement amounting to $12 million.
Zimbabwe Microfinance Fund managing director Brian Zimunhu said they slightly missed their cumulative loan disbursement target due to a slowdown in economic activity.
“We slightly missed our cumulative loan disbursement for 2015 largely due to the slowing down of economic activity.
“Also the uptake of loans was low due to the late start of the agricultural season’s preparations. You would find out that normally farmers start preparing for the next agricultural season in April but that process started late the previous year,” said Zimunhu.
“As a result, there was low uptake by MFIs that applied for on-lending development finance.”
The microfinance fund was established in 2012 to provide on-lending funding to MFIs dotted across the country as part of efforts to rejuvenate the sector that had collapsed at the height of economic meltdown in 2008.
“As at December 31, 2015 our cumulative disbursement were $11,2 million from $6,8 million in 2014. This year we’re targeting to disburse $7,5 million, which would then bring our cumulative loan disbursement to about $18 million,” he said.
“The potential demand for funding is high. However, actual demand backed by adequate systems and human capital is still limited.
“The sector needs a lot of capacity building in terms of developing microenterprise lending skills and the products to target micro entrepreneurs, rural enterprises and small holder farmers.”
The Zimbabwe Microfinance Fund disburses loans ranging from a minimum of $50,000 to a maximum of $1,5 million.
Last year, 20 MFIs benefited from the Zimbabwe Microfinance Fund while in 2014, Zimunhu said, 18 secured on-lending funding.
The major funders of the Zimbabwe Microfinance Facility are developmental partners.
“In addition, we also manage the rural finance facility under the Food and Agriculture Organisation’s livelihoods and food security programme. In light of the climatic conditions, the microfinance fund has this year planned a strategic decision in promoting adoption of climate smart technology and other forms or clean renewable energy.
“We’ve already taken the lead by dedicating resources to fund MFIs portfolios towards green financing. Further resource mobilisation is underway to grow funding and capacity building towards this market segment which, going forward would be very critical in mitigating the effects of climate change,” he said.