MFI loans down in H1

Loans by micro-finance institutions (MFIs) declined to $183,4 million in the half-year ended June 2016 compared to $187,2 million as at December 31, 2015 as the harsh economic environment restricted lending, the Reserve Bank of Zimbabwe (RBZ) has said.

BY TARISAI MANDIZHA

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In his 2016 mid-term monetary policy review statement, RBZ governor John Mangudya said the micro-finance sector was highly concentrated with the top 20 MFIs controlling 86,97% of total microfinance sector loans as at June 30, 2016.

“While productive lending is still below consumptive lending, the sector has registered notable re-orientation of the microfinance lending portfolios towards productive lending,” Mangudya said.

In the period under review, consumptive lending declined to 54,0% in 2016 from 70,9% of total loans in 2013.

The number of licensed institutions grew to 164 for the half year ended June 2016 from 152 in December 2015. Total assets grew to $250,97 million from $225,13 million in December 2015.

Mangudya said a robust credit infrastructure was critical for efficient operation of financial systems and by definition credit infrastructure was the set of laws and institutions that enable efficient and effective access to finance, stability and socially responsible economic growth.

“The key elements of an effective credit infrastructure are credit reference systems; secured transactions and collateral registries and insolvency and debt resolution frameworks,” he said.

He, however, said RBZ, in collaboration with government, has been seized with reforms aimed at enhancing the efficient operations of financial markets.

“The current initiatives to enhance credit infrastructure is expected to reduce the level of information asymmetry thus unlocking the potential for thousands of businesses to borrow, invest and grow.

In addition, credit infrastructure is expected to reduce the cost of credit thus lowering the cost of doing business and promoting price competitiveness and production,” he said.


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1 Comment

  1. My first job out of High School was at St Paul and over the next 5 years Iearned so very much. Seeing the hospital torn down tears a small piece of my heart out. The Daughters of Charity and the doctors and staff of St Paul Hospital will always be with me……
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