Harare,(New Ziana) – Zimbabwean micro-finance institutions (MFIs) disbursed loans worth $352.2 million in the quarter ending September 2019, an 11 percent jump from the previous quarter, latest data shows.
According to the Zimbabwe Association of Microfinance Institutions (Zamfi), the slight jump was due to high inflation and impact of currency changes implemented by the government during the period as MFIs sought to protect themselves.
“Going forward it should however be expected that lending by both banks and microfinance institutions is set to significantly increase after the Reserve Bank of Zimbabwe Monetary Policy Committee resolved to cut the overnight rate from 70 percent to 35 percent with effect from November 2019,” Zamfi said.
“This is meant to stimulate lending to productive sectors.”
In terms of distribution of the loans, agriculture and the productive sector were both tied at 33 percent while those deemed as consumptive and other loans respectively stood at 23 percent and 11 percent respectively.
“The agriculture sector a remains a clear favourite for finance by MFIs especially lending for the production of cereal crops, fruits, vegetables and milk which are in demand by a growing population,” Zamfi said.
“The sector has capacity to spur and boost production both for local and export markets, which in turn will generate the much needed foreign currency for the country.”
In the period, the sector saw its revenues jump to $78.2 million from $53.7 million, which, after expenses, translated to a net profit of $11.9 million from $6.9 million.