The government has engaged the African Export-Import Bank (Afrexim bank) and the Preferential Trade Area (PTA) Bank to create a facility to fund rural businesses in the country.
Industry and Commerce minister Welshman Ncube told the Nkayi business community during a consultative meeting last Friday the need for the fund was necessitated by the unequal access to bank loans by rural and urban businesses.
Rural businesses have raised concerns they were being sidelined and therefore required a specific fund to boost their operations.
“We are negotiating with Afrexim Bank and PTA Bank to source funds to assist rural businesses,” Ncube said. “For now we are also in talks with local banks, especially CBZ, to set aside at least 10% of loans they are giving out specifically for rural businesses.”
He said government was scouting for funds to inject into the banking sector. “Once that is done, we have plans this year to create a fund to cater for small-scale businesses, especially those in rural areas,” he said.
Ncube said the fund could materialise in the next few months.
Businesspeople in Nkayi told Ncube they were struggling to access loans as they did not have collateral demanded by most financial institutions.
The PTA Bank is one of a few developmental institutions that have lent Zimbabwe substantial amounts of money at a time a number of multilateral lenders have shied away.
Lack of capital has been identified as one of the major structural bottlenecks currently affecting Zimbabwe’s economy, hence the need to mobilise lines of credit to support productive sectors.
Last year, government and Afrexim Bank sealed a $70 million Zimbabwe Economic and Trade Revival Facility (Zetref) deal that is expected to breathe life into the country’s stuttering economic recovery.
Zetref was co-financed by government through the Ministry of Finance and Afreximbank.