adminZMWF technical fund manager Mr Brian Zimunhu urged Micro Finance Institutions and Savings and Credit Co-operatives at a meeting in Bulawayo on Monday to submit consistent and accurate information when submitting applications to the facility.
“In the previous applications, we noted concerns that include incomplete proposals or applications; inconsistent and inaccurate information and this has been the major challenge.
“When applying for the wholesale facility funding, let us present a true picture of our businesses to avoid disqualification,” he said.
He said so far three institutions had qualified for ZMWF resources.
“We have disbursed a total of $163 000 to three institutions that qualified for ZMWF resources. Two of these institutions are in Bulawayo while one is in Harare.
“We received 16 applications and when we carried our desktop review 11 were disqualified before we proceeded for due diligence that saw three institutions qualifying for funding,” said Mr Zimunhu without revealing the three organisations.
He said a number of the institutions were disqualified from funding because of lack of a clear business plan as well as audited financial statements for the past two years.
The wholesale facility is meant to assist money-lending institutions with seed capital at interest rates that range between nine and 16 percent per annum.
“The target market for ZMWF is non-bank MFIs, Saccos, micro-finance banks if formed. ZMWF products and services comprise rescue loans, stabilisation capital, growth capital and innovation capital,” he said.
Rescue capital allows relatively weak money-lending institutions to secure liquidity amounting to between $10 000 and $50 000 so that simple and other short-term activities are financed.
Stabilisation capital from the ZMWF was being issued to provide liquidity for gradual expansion of normal business and ranges from $50 000 to $100 000.
Mr Zimunhu said growth capital from $100 000 to $150 000 was designated as a revolving fund to form part of a growing capital while innovation capital ranged from $50 000 to $100 000.
Innovation capital was meant to enable micro-lending firms to introduce new products and services such as micro insurance and rural finance.
The Zimbabwe Association of Micro-Finance Institutions in conjunction with CBZ established an apex fund called the Zimbabwe Microfinance Wholesale Facility Trust to provide wholesale funding to financial service providers that serve micro, small and medium enterprises.
Resources from the wholesale facility are being disbursed through CBZ because the institution is licensed by the Reserve Bank to disburse the funds.
Online Reporter