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Prince Sunduzani, Business Reporter
HOMELINK Finance has availed a $15 million facility to the leather industry in the country towards retooling and capacity building.
Speaking on the sidelines of a workshop organised by the Leather Institute of Zimbabwe (LIZ) in Bulawayo yesterday, the financial institution’s sales and channels manager, Ms Sibusisiwe Mashoko, said the money would go towards enhancing exports and import substitution.
She added that Homelink was responding to the industry’s financial needs as players have indicated that they needed financial assistance to increase their competitiveness in the local and export market.
The tenure of the loans ranges from a year to three years depending on the intended use.
“The money has been earmarked for those that are into exports and import substitution. So we have realised that the leather industry has people who are exporting and doing import substitution so the leather industry players have access to that 15 million dollar facility,” said Ms Mashoko.
“We are looking at retooling the industry. Most of the conversations that we have been having with players from this section of the economy are those of old machinery that is reducing their level of competitiveness. So we are coming in to say we are able to meet that gap and finance them.”
She said the financial services firm will work with LIZ to build its capacity and boost the leather industry for them to be able to tap into the export market.
Leather industry stakeholders at the workshop cited lack of finance as one of the major hindrances to the growth of the industry adding that most industries were defunct and in critical need of re-capitalisation and retooling if the industry was to survive.
At its peak, the leather industry was one of the country’s top foreign currency earners, exporting leather footwear and other goods. Zimbabwe became the first country in Africa to do contract manufacturing of brands such as Nike, Adidas, Bubble Gummers, Grasshoppers, Pierre Cardin, Power, Puma and Reebok and the industry employed about 25 000 people. Government has been pushing for export-led growth and launched reforms to enhance the ease of doing export business as part of measures to remove bottlenecks that hamper exports.
Exports of raw commodities are the biggest contributor to foreign currency earnings according to figures from the RBZ while diaspora remittances also make a significant contribution. Zimbabwe is currently battling foreign currency challenges and an increase in exports will help narrow the deficit.
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