AFRICAN Century, Zimbabwe’s first microfinance company to be licenced to take deposits, will start doing so after it was given-up thumbs up by the Reserve Bank of Zimbabwe (RBZ).
BY OUR STAFF
This was confirmed by governor John Mangudya in his Monetary Policy Statement last week.
“The coming on board of deposit-taking microfinance institutions is envisaged to enhance access to financial services particularly by the lower income groups of our society, thereby promoting a savings culture in the economy,” Mangudya said.
Microfinance institutions are measured by aggregate lending and the sector had remained subdued due to inadequate funding.
As at September 2014 total loans in the sector amounted to $151,8 million down from $164,2 million recorded in Decemer 2013.
During the period under review portfolio at risk (PaR) improved to 12,1% as at September 30 2014 compared to 21,6% the previous year.
“The noted improvement in the PaR is attributable to enhanced credit risk management systems in the sector. In addition, some MFIs are increasingly making use of credit checks,” Mangudya said.
The sector’s aggregate loan portfolio was skewed towards consumption at the expense of productive sector funding which comprises salar- based loans that constituted 54,2% of total loans as at September 30 2014.
“Skills and capacity of microfinance institutions remain weak. The Reserve Bank is working with microfinance stakeholders towards the establishment of capacity building programme tailored for the microfinance industry. These efforts should result in the introduction of certification, diploma and degree programme in microfinance in the very short-term,” he said.
Mangudya said the central bank has been working with sector’s stakeholders to promote productive lending and productive lending has increased to 45,6% as at September 30 2014 from 29,1% as at December 31 2013.
As at September 30 last year, the country had 482 microfinance institutions branches serving 220 357 clients with 252 565 loan accounts throughout the country.