The Zimbabwe Micro-finance Fund (formerly the Zimbabwe Micro-finance Wholesale Facility) said yesterday its loan disbursements shot up by more than 50 percent to $10,3 million this year as appetite for funding from microfinance institutions (MFIs) remained high.
The fund was set up with the assistance of donors in 2012 to provide working capital to MFIs at lower interest rates compared to what banks offer.
Fund manager Brian Zimunhu told New Ziana disbursements shot up from $6,8 million last year to $10,3 million by end of November this year.
“Potential demand for funding is very high. However, actual demand backed by adequate systems and human capital is still limited,” he said.
“The sector needs a lot of capacity building in terms of developing micro-enterprise lending skills and products to target micro-entrepreneurs, rural enterprises and small holder farmers.”
Mr Zimunhu’s sentiments echo those of the Reserve Bank of Zimbabwe which recently called for re-orientation of the institutions to ensure they target people living in marginalised areas.
MFIs have been encouraged to invest not only in human resources but also in information communication technologies to improve management and sustainability of their operations.
According to Mr Zimunhu, the number of MFIs that benefited from ZMF support this year marginally increased to 20 from 18 last year.
The fund extends loans of a minimum of $50 000 and a maximum of $1,5 million to micro-finance institutions at below 13 percent per annum interest.
Zimbabwe had 11 6 MFIs in operation at the end of September this year after 31 of them closed shop in the second half of the year due to viability concerns.
Mr Zimunhu said the sector also required capacitation to develop financial products to finance climate smart technology.
“The ZMF has already taken the lead by dedicating resources to fund MFI portfolios towards green financing,” Mr Zimunhu said.
“Further resource mobilisation is underway to grow funding towards this market segment which, going forward, is going to be very critical in mitigating the effects of climate change.”
At its establishment, the ZMF received seed capital from the United Kingdom’s DFID, HIVOS, Germany’s GIZ and the Danish organisation, Danida.
In addition, ZMF also manages the rural finance facility under the Food and Agricultural Organisation Livelihoods and Food Security Programme. — New Ziana.