THE Zimbabwe Microfinance Fund (ZMF) will this year diversify its portfolio by providing loans directly to players in the Small-to-Medium Enterprises sector as part of a broader scope to foster economic development.
In the past, ZMF has been providing on-lending capital to Microfinance Institutions (MFIs) who in turn have to some extent support the SMEs across the country with loans to boost their operations.
ZMF managing director Mr Brian Zimunhu, told our Bulawayo Bureau yesterday that while lending to MFIs remains their core business, his organisation will this year introduce direct lending to players within the SMEs sector.
“While our core business remains lending MFIs with 60 percent of our funding going towards the sector, we are also planning to introduce a number of other product where we are looking at lending SMEs directly,” he highlighted.
Considering the obtaining economic climate, ZMF was looking at lending the targeted SMEs with funding not less than ZWL$100 000 to a maximum of ZWL$500 000.
Lending directly to SMEs by ZMF has been necessitated by the desire to promote economic developmental agenda,” Mr Zimunhu said.
“We have realised that while players in the financial services sector have contributed significantly to economic development by providing loans to SMEs, we want to
do direct lending to bigger SMEs in particular sectors like renewable energy, agri-business as well as educational institutions offering edu-loans,” he disclosed.
Meanwhile, the Zimbabwe Association of Microfinance Institutions (Zamfi) revealed in its analysis report of the microfinance sector for the third quarter ended September 30, 2019, that credit-only MFIs sector’s total loan book improved marginally to $352,2 million from $316,3 million the previous quarter.
Zamfi indicated that it was worried about the marginal increase in total loan book if compared to a growth rate of $66,2 million during the March-June 2019 quarter.
The report noted that this was a worrying trend especially when the exchange rate depreciated from US$: ZWL$6,54 as at June 30, 2019 to US$: ZWL$15,19 as at September 30, 2019.
The microfinance association highlighted that the overall net effect of inflation was a significant reduction of microfinance balance sheets in US dollar terms when compared with the 2015 period when the bond note surrogate currency was first introduced.