In this week’s installment, Zimbabwe Association of Micro-finance Institutions (Zamfi) executive director, Godfrey Chitambo (GCC) talks to NewsDay financial columnist Omen Nyevero Muza (ONM) about the sector’s forthcoming summer school, the regulatory review Zamfi is carrying out as well as the sector’s current challenges and opportunities.
FINANCIAL SECTOR SPOTLIGHT BY OMEN MUZA
ONM: The financial sector spotlight understands that Zamfi will be holding its first ever summer school on December 4 and 5 2015, at Montclair Resort and Casino in Nyanga. Why has the association decided to introduce this particular event on its calendar after all these years?
GCC: We feel this is the right time in our journey of establishing a sustainable micro-finance sector in Zimbabwe to introduce this exciting event on our calendar. The sector is now formally recognised by all stakeholders including the government through the Micro-finance Act, which was passed into law in 2013. Prior to this period we were not fully recognised. Our contribution, as a sector, to the economic development and poverty alleviation strategies is something that we are now proud of, hence, the the holding of the first ever summer school. It is also a time to take stock and prepare for the explosion of micro-finance into the next phase.
ONM: What’s the theme of the event and could you outline some of the key issues delegates can expect to discuss at the summer school?
GCC: The theme is Redefining Micro-finance. We are redefining ourselves. We have come of age and now want all stakeholders to understand what we stand for. It is only us who can define what we want to be known for so we are taking the responsibility of informing those stakeholders. Key issues that will be up for discussion include the status of the sector from a regulatory perspective, strategies to deal with operational problems, the use of technology in the sector to improve on efficiency and current trends in the region and international market on micro-finance.
ONM: In terms of delegates, what’s the mix of individual and institutional partners you are looking forward to welcoming at this inaugural event?
GCC: The bulk of the participants will be micro-finance CEOs and their board members. Regulators, developmental partners, consultants, government representatives and a few selected service providers will constitute the rest. The event will be officially opened by the Reserve Bank of Zimbabwe deputy governor, Charity Dhliwayo
ONM: Is the summer school likely to evolve into an annual event?
GCC: Definitely. Once you begin something and your members like it, then surely it should become an annual event. We hope it will run for the next 10 years and then we will review its relevance and format. At the end of this year’s event we will decide where and when to hold next year’s event, the topics and potential presenters. It might definitely be in Bulawayo next year.
ONM: Are you partnering anyone for the 2015 event?
GCC: As has always been the case, we have the support of our developmental partners, the government and our regulators. We are very much grateful of their support both in terms of funding, technical assistance as well as lobbying on our behalf on issues that we cannot do on our own. We will make the 2016 event better, hopefully, since this is only the starting point. We had to fire the first shots, with little external support, but next year we are very sure we will have a lot of partners coming to join in.
ONM: I understand that the association is currently seized with a review or audit of the regulatory framework of the micro-finance sector. What is the purpose of the review?
GCC: The review is meant to identify any regulatory gaps with respect to our current framework for regulating and supervising the micro-finance sector. Once this is done, then relevant stakeholders will be approached to see how best we can respond positively to the findings. Some findings may require expression in a policy, while some may require amendment to our current micro-finance laws and regulations. We are hoping that we shall have the first draft report at the summer school as well.
ONM: What would you say are the micro-finance sector’s biggest challenges at the moment?
GCC: We used to think it was funding, but now we have found out that we should also look at efficiency and the use of technology that is how to use technology to reduce costs, reach more of our clients and contribute effectively to financial inclusion. In this way, we will grow the cake, rather than concentrating on a few urban based clients which inadvertently would then result in payroll-based lending.
ONM: And opportunities? Do you see any?
GCC: As long as our country has people without access to financial services, then micro-finance is there to fill that gap. Poverty is still alive and entrenched in our communities and micro-finance is one of the many tools that can be used to eradicate it. The (Millennium Development Goals) MDGs and their successors the (Sustainable Development Goals) SDGs are firm believers in this theory so is ZimAsset. Our role is to put all these into motion, sustainably.
ONM: For those not familiar with the activities of Zamfi, would you like to talk briefly about its mandate?
GCC: Ours it to assist in the creation of a sustainable and vibrant micro-finance sector in Zimbabwe that is well supported by an enabling regulatory and policy environment. To effectively achieve this, Zamfi is actively engaged in lobbying and advocacy, on behalf of its members, with key stakeholders such as government and development partners. We participate in many activities such as micro-finance policy making and crafting of new laws and regulations, performance monitoring, compliance, technical advisory services and consultancy assignments in the region. We are also a hub of local and regional networking and knowledge dissemination events, of which the summer school of one.
ONM: So, who can become a member of Zamfi and what benefits do they enjoy as a result?
GCC: Any micro-finance institution with a licence certificate from the central bank or a Sacco licence from the relevant ministry (currently Ministry of Small and Medium Enterprises and Co-operative Development), can apply to be a member. Members enjoys our services of capacity building, training for staff as well as access to technical advisory services,
ONM: Given the shift in the structure of the economy from a formal to a largely informal configuration, do you think that the role that the micro-finance sector now plays is sufficiently acknowledged by key stakeholders?
GCC: No, we don’t think so. Although we have done a lot to create awareness amongst the relevant stakeholders, we believe that there are still a lot of information gaps from policy makers to the public. We will, therefore, continue engaging the public on topical issues through fora such as public lectures. We want to believe, however, that we are getting there!
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