Govt failed Dimaf — Bimha

via Govt failed Dimaf — Bimha – NewsDay Zimbabwe July 3, 2014

AT LEAST 48 companies have accessed the Distressed Industries and Marginalised Areas Fund (Dimaf), but government has failed to put its share to the pool of resources meant to assist ailing companies, a government official has said.

Industry and Commerce minister Mike Bimha told a parliamentary portfolio committee on Industry and Commerce that of the companies that benefited, 26 were from Bulawayo while the remainder was from other provinces.

Dimaf was formed in 2010 to help companies retool. Government and Old Mutual were supposed to inject $20 million each. To date, Old Mutual has put in $27 million. Old Mutual’s subsidiary, CABS, manages the fund.

Bimha said the failure by government to honour its part was a bad start for Dimaf.

“Old Mutual honoured its obligation and put its $20 million, but government didn’t honour, so there was only $20 million available which is a drop in the ocean, even $40 million for that matter.

But then it was supposed to be the beginning, but it was a very bad beginning because government didn’t honour its side of the bargain,” Bimha said.

“To date CABS has put $27 million for Dimaf and this is what has been disbursed up to date but this $27 million was only given to about 48 companies only, with 26 in Bulawayo and the other shared among other provinces.”

He said the Dimaf was not enough and the conditions were too stringent for ailing companies to be able to access the fund adding that government has engaged Old Mutual and CABS to relax the terms and conditions.

“The terms were even tough for an ailing company. They wanted audited accounts for the past five years and collateral. These are ailing companies and how do you prove that you are going to pay when you are already dead?” Bimha said.

He, however, said government and the private sector were looking at a number of strategies to source for more funding to assist ailing companies and the results are expected to materialise in the future.

“Together, we are also looking at how we can enlarge the fund by them [private sector] also approaching other financial institutions within and outside the country so that Dimaf can be bigger and more accessible to companies,” Bimha said.

He said the government was also in discussions with Common Market for Eastern and Southern Africa to put up a regional facility with the participation of regional players such as PTA and other to assist local companies.