adminFreedom Mupanedemo Midlands Bureau
Micro-finance companies offering loans here are recording brisk business as individuals and parents with school-going children throng the institutions in search of cash, as the “January disease” begins to bite. A snap survey conducted by The Herald yesterday witnessed long queues at lending firms dotted around the city. Other such institutions were turning away new clients after they reached the total number required.
“We have closed our books. We give out loans to 200 clients per month, and we have already reached that number. We are not taking new clients, but only serving those intending to service their loans,” said an official with a micro-finance company along Fourth Street.
The official said they were giving people loans of up to $200 cash to civil savants, and $50 cash to non-civil servants at an interest rate of 30 percent.
“The challenge is that we are one of the only few remaining micro-finance institutions giving cash to our clients. There is pressure at the moment with most parents preparing to send their children back to school.
At another micro-finance loan firm along Robert Mugabe Road, clients were seen filling up loan forms outside the offices due to congestion. Meanwhile, loan seekers interviewed said some institutions were taking advantage of the demand to charge huge interests.
“I have gone around making inquiries and discovered that these institutions are charging between 30 and 35 percent interest rates. I took a loan with another institution some time last year and the interest was 20 percent of the total amount,” said Mrs Lorraine Tshuma.
She said she wanted a loan for school fees.
“Its tough, I have no choice. Despite the high interests, I have to go for it because I have twins who are supposed to go for Form One, so I desperately need their fees,” she said.
Another loan seeker who declined to be named said he spent a lot during the festive season and was now trying to make ends meet.
Online Reporter