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6 firms eye MicroKing

Business
Six companies — local and regional players — have submitted their bids to acquire MicroKing, a microfinance unit for AfrAsia Kingdom Holdings.

Six companies — local and regional players — have submitted their bids to acquire MicroKing, a microfinance unit for AfrAsia Kingdom Holdings.

BY VICTORIA MTOMBA

Sources yesterday said the Reserve Bank of Zimbabwe and the Deposit Protection Corporation (DPC) were currently adjudicating the process.

They said the six companies, including a Zambian firm, had shown interest in the microfinance institution. The Zambian firm is understood to have shown interest in AfrAsia Bank Zimbabwe before its licence was cancelled last month.

“The six companies included Innscor and a Zambian firm which is quite liquid and can invest hugely in the company. The Zambian company has been in negotiations with AfrAsia and also wants to set up a bio-energy plant in the country,” sources said.

The sources said that listed entity Old Mutual was also interested in the microfinance company but was late in submitting its bid. DPC chief executive officer John Chikura however, expressed ignorance on the MicroKing bids.

“We are just hearing about this. I haven’t seen any bids, maybe they are at the central bank,” he said.

The Department for International Development (DFID) United Kingdom said it had investments amounting to $800 000 in MicroKing.

Finance minister Patrick Chinamasa recently said government would bend the rules to save MicroKing from collapse as the microfinance company was assisting the informal sector.

MicroKing has been lending finance to medium and small enterprises.

Since 2009, the microfinance channelled over $200 million to SMEs. Micro lending has become an important feature in lending in the country as the economy is now dominated by the informal sector. The country’s formal sector takes up to 20% of the economy, while the rest is in the informal sector.

Zimbabwe’s economy has shifted from being formal to informal as most companies are closing down due to the harsh economic conditions.