HomeLocal NewsCabinet delays $40m fund

Cabinet delays $40m fund

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Cabinet is yet to finalise criteria for the disbursement of the $40 million rescue package for distressed Bulawayo companies despite an announcement by a local bank that it is ready to roll out the loans.

CABS on Wednesday issued a statement saying it had been given the mandate to distribute the money and laid out requirements to prospective beneficiaries.

In a statement, the bank said applicants owning distressed firms would be required to produce detailed strategic business plans to turn around their companies.

“CABS is pleased to announce that Old Mutual Zimbabwe, in partnership with the Government of Zimbabwe, has established the Distressed and Marginalised Areas Fund,’’ reads part of the statement.

But, Industry and Commerce minister Welshman Ncube, who also chairs the eight-member Cabinet taskforce in charge of the fund, said Cabinet had not met on Tuesday as expected to discuss the fund. He said the money would not be distributed until government agreed on the modalities for its disbursement.

“The funds will not be released until Cabinet sits and approves the processes, procedures and rules on how the money will be released,” he told NewsDay.

Ncube said they had expected the issue to be discussed last week, but it was not on the agenda.

“We are hoping that Cabinet will sit next week and it is only after modalities have been discussed that the money will be released,” he said.

Cabinet did not meet on Tuesday because President Robert Mugabe is in Asia on an official visit.

Meanwhile, CABS said the fund would allow companies to buy equipment and raw materials for use in enhancing output, quality of goods
being produced and to assist them in meeting their operating costs.

“Acceptable collateral, professional registered with a recognised professional association, should be in practice for at least five years.”

The bank said under the partnership, Old Mutual Zimbabwe would inject $20 million while the government would chip in with $20 million towards the fund.

However, it is not clear whether government has managed to source its $20 million pledge.

Of late, there have been reports that some politicians had clandestinely registered private companies in a bid to benefit from the scheme.

Government recently launched the revolving fund to resuscitate firms in the city, but delays in spelling out distribution modalities have caused anxiety.

Official statistics show that more than 85 firms have closed down in the city, including 19 in the clothing and textiles sector, 63 in the motor industry and three in the construction sector, while five companies were reported to be under judicial management.

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