Bianca Mlilo, Business Reporter
THE Zimbabwe Association of Microfinance Institutions (Zamfi) says it has complied with the Reserve Bank of Zimbabwe’s directive to cap its lending rates at 10 percent interest per month.
Reserve Bank of Zimbabwe Governor Dr John Mangudya directed, in the mid-term monetary policy statement last year, that microfinance institutions (MFIs) should reduce their interest rates.
This followed concerns that some MFIs were charging interests of 20 percent or more per month.
The deadline for compliance with the directive was set at October 1, 2016 but Zamfi managed to negotiate for a delayed implementation to January 1, 2017 to allow MFIs enough time to realign their cost structures to the new reality.
Zamfi executive director Mr Godfrey Chitambo said some of their members had reduced their rates way before the directive was set.
“We will liaise with our offices across the country and carry out an exercise to check our members’ compliance, which will be complete by end of next week,” he said.
Zimbabwe Microfinance Fund (ZMF) managing director, Mr Brian Zimunhu, said that dialogue between the regulator and Zamfi to review the feasibility of the directive was ongoing.
Meanwhile, ZMF says it has, in line with the national financial inclusion strategy, re-engineered its product offerings to include loans for small to medium enterprises, as well as agricultural loans.
Other loans to be extended include housing, green and institutional loans, as well as micro-leasing and quasi-debt finance.
“This will help our clients respond by developing appropriate products for the various MSME operating in our country,” said Mr Zimunhu.
“ZMF’s target in terms of disbursements for 2017 alone is $10 million. This will take our cumulative disbursements from inception to $26 million. Our target outstanding portfolio as at end of December 2017 is $14,5 million.”
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 MFI sector that had collapsed during the hyper-inflationary era of 2008.
It disburses loans ranging from a minimum of $50 000 to a maximum of $1,5 million.