Oliver Kazunga, Senior Business Reporter
ZIMBABWE’S credit-only microfinance sector recorded a 574,1 percent spike in capital base at ZWL$946,5 million in the first quarter ended March 31, 2021 compared to ZWL$140,4 million in the corresponding period last year.
The positive performance was driven by players in the sector’s deliberate and strategic shift to embrace digitisation of their operations mainly related to disbursements and repayments of loans and advances in light of the Covid-19.
According to a performance report for the quarter under review released by the Zimbabwe Association of Microfinance Institutions (Zamfi) said majority of Microfinance Institutions (MFIs) were already above the US$25 000 or ZWL$2 million regulatory minimum capital threshold.
“The capital base of credit only MFIs amounted to ZWL$946,5 million as at 31 March 2021, a significant increase from ZWL$140,4 million reported in March 2020.
“The majority of the MFIs are already above the USD$25 000 or ZW$2 million minimum capital required by the central bank for compliance by 31 December 2021 for credit only microfinance institutions,” said the association.
It said the sector was adequately capitalised and is expected to remain stable with capacity to absorb any unexpected losses in the near future with minimal capital risk.
“The key source of the capital growth for the industry shall remain being retained earnings, while shareholders equity and debt capital shall continue to play a complementary role to the overall capital injection strategy for the MFIs,” said Zamfi. [email protected]