Uproar over proposed microfinance law

and regulation of MFIs.
It also seeks to amend the Money Lending and Rates of Interest Act.
However, the association’s members, who met in Harare to discuss the new law, said the Bill failed to take their proposals into account.
The Bill will soon be forwarded for debate and approval in Parliament before it becomes law.
“Most of the recommendations that we made were not incorporated,” said former Zamfi chairman Mr Godfrey Jokonya.
One of the most contentious issues that the members cited regarded the licensing of microfinance institutions.
While Zamfi had proposed renewal after every three years, the Bill proposes yearly renewal.
“Even the central bank said they would prefer a three-year licence but in the document it is still one year,” Mr Jokonya said. — New Ziana.
“It is instead a client protection Bill. They are actually saying to our clients do not pay back interest which we charge them,” said one association member.
Zamfi executive director Mr Godfrey Chitambo said the organisation would take discussions on the Bill across the country so that they can push for amendments before it becomes law. Other members said the Bill protected the interest of the members of the public more than the sector.
“It’s a client protection Bill, they are actually saying they should not pay back the interest that we charge them,” another member said. Other top officials, who did not want to be named, said the Attorney General’s Office, which drafted the Bill, had not taken heed of the association’s proposals in spite of them having lobbied for over two years.
Some disgruntled members even criticised the AGs Office for using people who lacked knowledge about the financial sector to draft the Bill. The members also wanted the Bill to repeal and not amend the Money Lending and Rates of Interest Act that they argued was “archaic.”
MicroKing managing director Mr Tamirira Rusheche said the Bill should have leaned more towards promoting developmental lending and not money lending in general.
“This is what most donors are interested in, not developmental lending,” he said.
He said the reason why the MFI sector was flourishing in most countries was due to regulatory frameworks that promoted development lending, which uplifted the lives of ordinary people.
Most donors have pulled out of financing MFIs in Zimbabwe, which has left Zamfi struggling to source finding for its members.
But Government, through the Bill, has recognised the importance of the sector and seeks to regularise their operations.
Zamfi executive director, Mr Godfrey Chitambo said the organisation would take discussions on the Bill across the country so that they can push for amendments before it becomes law. — New Ziana.