Online Reporter
Business Reporter
THE Reserve Bank of Zimbabwe (RBZ) has disbursed ZiG350 million through its Targeted Finance Facility (TFF), launched in February this year, to support key productive sectors.
The facility largely supported the manufacturing and agricultural sectors, which accounted for 44,82 percent and 34,73 percent of the total disbursements, respectively, as of June 30, the central bank said.
The TFF’s core objective is to ensure a continuous flow of credit to these vital areas of the economy.
The introduction of the TFF followed the RBZ’s implementation of tight monetary policy measures to address excess market liquidity and speculative tendencies, including an increase in the bank policy rate and statutory reserve requirements.
While these tightening measures aimed to instill market discipline, they inadvertently led to payment gridlocks and tight liquidity conditions, posing a risk to economic activity.
To mitigate the unintended consequences and strike a balance between financial stability and economic growth, the RBZ established the TFF.
The facility, with a maximum allocation of ZiG600 million, is funded by banks’ statutory reserves held at the central bank.
It aims to resolve liquidity bottlenecks while simultaneously encouraging bank lending to productive sectors.
To ensure responsible allocation, banks conduct thorough due diligence with their customers, ensuring that only genuinely productive activities receive funding.
