Harare, (New Ziana) – The Reserve Bank of Zimbabwe on Wednesday extended, yet again, the curatorship for troubled money lender, Lion Microfinance, to end of this month.
The financial institution was placed under curatorship of the
Deposit Protection Corporation (DPC) on July 26 last year due to
under-capitalisation and weak governance issues.
The DPC in turn then appointed Ngoni Kudenga of BDO Tax and Advisory
Services to manage the curatorship process.
Continued extension signals challenges faced in the recovery process
for the microfinance institution after the DPC last year said it was
focused on restoring the firm’s operations “in the shortest possible
time.”
“Notice is hereby given that the curatorship of Lion Microfinance has
been extended by a further period up to 31 July 2020,” the central
bank said.
“The Reserve Bank of Zimbabwe has similarly extended the appointment
of the curator, the Deposit Protection Corporation accordingly.”
During a curatorship, the board and management of a firm are
relieved of their control of the institution, with the curator or
administrator taking over the full management functions of the
institution for purposes of rehabilitating it.
Curatorships are generally triggered by concerns about the management
or financial viability of the bank.
In September last year, the central bank allowed Lion Microfinance,
which is a deposit taking microfinance institution (DTMFI), to
partially re-open its doors to the public but only for lending
purposes.
Unlike ordinary microfinance institutions, DTMFIs are a special breed,
which are involved in both lending micro-loans and taking deposits
from the public.
New Ziana
