adminfrom funds it extended to local banks.
NSSA has so far provided US$180 million, mobilised from workers’ contributions to the authority and given to banks to extend to distressed companies.
NSSA general manager, Mr James Mutizwa said by the end of June this year, the authority had extended $179 388 202 to local banks for on-lending to companies.
He was addressing delegates at the CZI annual congress held at the Elephant Hills Hotel in Victoria Falls.
The amount disbursed to banks represents a significant increase in funding extended to banks, considering the figure stood at US$51 994 026 in December 2009.
Mr Matiza said the funding helped address the serious financial requirements of most indigenous banks that would otherwise have closed shop.
“If we were to recall that money, a number of small banks would close down,” he said.
About 20 banks are handling the funds with loan limits ranging between US$2 million and US$18 million. Loans to the productive sectors range between US$100 000 and US$5 million and the tenure varies from 30 days to a year.
In response to the high cost of finance that has made borrowing prohibitive, NSSA has set a ceiling on the rate at which banks could lend the money to companies.
Mr Matiza said all banks handling NSSA funds would not be allowed to lend to companies at an annual interest exceeding 12 percent a year. Banks provide security to NSSA for funding and if a company defaults, the authority will not suffer any loss.
NSSA can recover the money, since these are public funds, directly from the company that would have benefited in the event a bank closes down. Apart from taking measures to ease the liquidity crunch on the economy the authority is also a major investor on the Zimbabwe Stock Exchange.
It has shareholding in 64 companies. The parastatal has investments, among others, in CBZ Bank, Rainbow Tourism Group, retail group OK Zimbabwe, diversified group AICO and insurance group Zimre.
NSSA holds 43,12 percent in Africom Continental, 40 percent in FBC Building Society, 37 percent in ZB Building Society and 29 percent in NicozDiamond.
It has a 27,47 percent stake in Fidelity, 26,39 in FBC Holdings, 24 percent in Starafrica, 22 percent in AICO, 19 percent in Zimre, 18 percent in OK Zim, 17,42 percent in Interfin, 12,87 percent in RTG and 11,66 percent in CBZ.
As at the end of May this year, the parastatal’s balance sheet had US$443 908 525, he said. NSSA has used its liquidity to assist companies in which it is invested and had applied a total of US$13 million towards following its rights since 2009.
There are 78 counters on the Zimbabwe Stock Exchange. “It’s clear here in Zimbabwe that social security funds have and are playing a pivotal role in economic stabilisation and development,” said Mr Matiza.
He said the investments were held through investments on the ZSE, prescribed assets, the money market, real estate, housing and empowerment projects.
He said that 31 percent of the investments were in equities, 1,5 percent in prescribed assets, 39 percent on the money market, 4,5 percent in real estate, 24 percent in housing and 0,2 percent in empowerment projects.
Online Reporter