Dimaf lending terms relaxed

Harare Bureau
INDUSTRY and Trade Minister Michael Bimha says Old Mutual Zimbabwe has agreed to relax lending terms of the Distressed Industries and Marginalised Areas Fund that were seen as too restrictive by ailing companies.The minimum requirements for companies to qualify to access the funds included two years’ management and financial accounts, acceptable collateral, clean tax record, projections for capital expenditure loans, budgets and cash flows, among others.

Old Mutual and the government signed a memorandum of understanding to set up a $40million revolving fund with each party contributing $20 million meant for the resuscitation of ailing companies.

Minister Bimha, while making a presentation before Parliamentary Portfolio Committee on Industry and Commerce yesterday, said there is an acknowledgement that industry is dead hence the need for recapitalisation.

“When CABS was given the role to administer the fund, they laid down terms and conditions but these conditions proved tough,” the minister told MPs.

“So, the government engaged Old Mutual on the possibility of relaxing some of those terms and they agreed.”

Between 2010 and 2012, former Finance Minister Tendai Biti promised to put $5 million into Dimaf but the promise was never honoured. CABS increased by $7 million to $27 million the amount disbursed to date.

The money went towards 48 companies, 26 of which are in Bulawayo and the remainder is shared among other provinces.

“The starting point is for them to relax some of the terms and conditions of Dimaf,” Minister Bimha said. “Together, we’re looking at how we can enlarge the fund while Old Mutual will approach other financial institutions within and outside the country so that the fund can be more accessible to companies.”

Companies hardest hit by economic challenges of the past decade are mainly located in Bulawayo, once the country’s light industry hub that employed thousands of people.

Minister Bimha said the government is also discussing with Common Market for Eastern and Southern Africa for the establishment of a regional facility that will also attract the participation of regional players such as PTA and others with a view to providing more assistance to local companies.