Banks frustrate RBZ: Business soft loans scheme not embraced

13 Apr, 2018 - 00:04 0 Views
Banks frustrate RBZ: Business soft loans scheme not embraced Mr Kasada Sibanda

The Chronicle

Mr Kasada Sibanda

Mr Kasada Sibanda

Oliver Kazunga, Senior Business Reporter
A NUMBER of Reserve Bank of Zimbabwe (RBZ) funding schemes are not accessible to businesses due to reluctance to disburse them by the banking sector, an official has said.

The apex bank has acknowledged lack of effective disbursement, which is blamed for frustrating economic recovery. This is despite the fact that the loans under the RBZ facilities are the lowest in the market with an interest rate of 7.5 percent per annum compared to above 10 percent offered by private finance houses.

RBZ funding schemes include the $200 million export finance facility, women empowerment fund ($15 million), business linkage facility ($10 million), microfinance revolving facility ($10 million), tourism support facility ($15 million), gold support facility of ($150 million), cross border facility ($15 million), tobacco export finance facility ($70 million), horticulture facility ($10 million), youth empowerment fund ($10 million), soya beans facility ($21,51 million) and the $5 million facility for persons with disability.

RBZ Bulawayo branch deputy director Mr Kasada Sibanda told industry executives during the Matabeleland Chamber of Industries annual general meeting in Bulawayo on Wednesday that the central bank was receiving complaints over poor disbursements of these loans by banks.

“We are aware of the reluctance of banks disbursing these soft loans. The Reserve Bank is looking into ways and means of maybe using a different model so that we encourage our industry players to access these facilities since the banks have not given us much leeway,” he said.

Mr Sibanda said RBZ hoped that the country’s risk premium would be reduced following the coming in of the new political dispensation, which was working towards improving Zimbabwe’s relations with the international community.

It is anticipated that as a result of a reduction in the country’s risk profile, the cost of borrowing money locally and offshore would be lowered.

“The country’s risk premium has been quite high. We are looking forward to the engagement with the international community to reduce that risk and therefore trigger a reduction in the cost of money,” he said.

“I hope we are all aware in terms of the LIBOR (London Interbank Offered Rate), which are obtaining and presently are less than one percent but here we are — talking of local banks charging 12 to 15 percent and we (RBZ facilities being disbursed through selected local banks) are at 7.5 percent.

“So we do agree that the rates are still high, but l think as we work around the challenges as a nation, hopefully they will come down and industry will benefit in terms of a reduction in cost.”

Zimbabwe’s relations with the international community have been sour for close to two decades after the country embarked on the Land Reform programme in 2000. Earlier in his address, Mr Sibanda said the Government and the private sector should work together to enhance the availability of the much-needed foreign currency to stimulate productivity across all economic sectors.

“We do allocate foreign currency as the Reserve Bank but as a residual after meeting the national requirements. But we have seen pressure coming to the bank indicating that they (banks) are requesting industry to come to the bank (RBZ) for their allocations.

“We have heard some of your members phoning us every Tuesday asking for forex allocations. At times we just wonder because we are looking at the banks distributing what their customers would have generated,” he said.

Mr Sibanda said the RBZ has also gone out of its way to assist industry secure raw materials by coming up with the $600 million AfreximBank nostro stabilisation facility.

“September 2017 to March this year has been very difficult in terms of foreign currency allocations as that period is the post tobacco selling season when the forex inflows are at a minimal.

“We are hoping that as our tobacco selling season continues, there will be an easing somewhat in terms of foreign currency receipts,” he said.

This year’s tobacco marketing season began on March 21 and it is hoped that $1.2 billion will be generated from exporting the golden leaf up from $904 million raised last year.

“However, it (tobacco selling season) is not the panacea for all our challenges, the challenge really is for industry to ramp up production, which in turn will assist us in terms of forex generation,“ said Mr Sibanda. — @okazunga

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