IDC keen to assume banking operations

is keen to take over the banking function proposed in the country’s draft Industrial Development Policy.
This will result in the corporation becoming the main financing agent for the local industry.
Government has in the draft IDP for 2011 to 2015 proposed to set up an Industrial Development Bank whose key role will be to provide short- and long-term financing for the recapitalisation of industry in a bid to enhance production.
Mr Ndudzo said the corporation was ready to take over the function of financing industry, arguing there was no need for the establishment of another bank.
The corporation, he said, was already mandated to undertake such a function as the Act that established it gives the corporation permission to establish a financial institution.
“We are not asking for anything new. It will be just triggering off a latent function,” he said.
Mr Ndudzo said the IDC had been modelled along the same lines as South Africa’s IDC which has in the last few years extended financial support to a number of Zimbabwean companies.
The IDC role in the economy is to add value through industrial processes and capital formation (foreign direct investment) to create wealth, employment and industrial development in Zimbabwe.
Owing to financial constraints, IDC has largely concentrated on joint ventures such as textile producer Modzone and Sino-Zimbabwe Cement Company.
Establishment of the bank has already received mixed feelings from industrialists with some shooting down the proposal arguing that Zimbabwe already had too many banks, which could be used for such a function.
However, the Confederation of Zimbabwe Industries backs the proposal.
The absence of a dedicated industrial bank has constrained efforts to revive the economy. Industry currently operates at less than 45 percent capacity utilisation levels. The situation has been worsened by the high cost of finance.
A number of facilities organised by Government for industry’s benefit have reportedly failed to make a significant impact in improving performance. – New Ziana