THE Government will soon engage local banks to persuade them to continue bankrolling the Distressed Industries and Marginalised Areas Fund (Dimaf) since it has failed to avail its own portion to the facility. In 2011, Government in partnership with Old Mutual established a US$40 million fund to revive ailing companies in the country especially in Bulawayo.
Under the partnership, Old Mutual was supposed to avail US$20 million while Government would pour in a similar amount with the money being disbursed through CABS.
Industry and Commerce acting permanent secretary Mr Stansilaus Mangoma said Government was seeking a new arrangement in which it would provide a guarantee to the firms.
“You will recall that it was a dollar for a dollar, whatever the banks were going to give as line of credit to industries for the purchase of raw materials Government was also going to put its dollar,” he said.
“So there was US$40 million originally and out of that US$40 million Government was going to contribute US$20 million and the financial institutions US$20 million.
The financial institutions have given their US$20 million but Government because of lack of fiscal space was not able, but we are saying that money is still required and this is what we are going to engage them about. Can’t they just rely on a Government guarantee so that they continue lending notwithstanding the fact that we have not honoured our part.”
Mr Mangoma was appearing before the Parliamentary Portfolio Committee on Industry and Commerce. — New Ziana.