adminTHE Zimbabwe Association of Micro Finance Institutions (Zamfi) said on Tuesday it is pushing its members to expand their portfolios to finance projects which have a positive impact on the environment. In line with this objective, Zamfi, supported by other stakeholders, was running a two-day “green micro-finance conference” to raise awareness on the importance and social and economic benefits of financial institutions funding environmentally sustainable operations.
Green financing expert Mr Geert Jan Schuite told delegates that green-financing meant that MFIs had to focus on projects “which do business today without compromising the well-being of future generations.”
“MFIs and their associations must be looking at climate change and say what does this mean for our business and the future.
“What actions can we take and what products can we design to finance the green agenda,” Mr Schuite said. Green financing is a concept that is already being practised in other southern African countries such as Angola and Malawi.
Mr Schuite said financiers had to look at market opportunities in the greening drive, which could be supported while calling on funders to stop“ignoring” climate change as it was already affecting the world.
Zamfi executive director, Mr Godfrey Chitambo said MFIs could extend lending to projects dealing with renewable energy and those supporting the environment.
“Traditionally, the MFIs would say that is not our business but we are saying, the next level is to do with renewable energy and the environment,” he said.
Mr Chitambo said the institutions must also cease supporting projects that are potentially harmful to the environment.
MFIs have become the major source of funding for most small to medium enterprises (SMEs) which are at the heart of economic activity in Zimbabwe.
With stringent lending conditions pushing them away from commercial banking institutions, SMEs have turned to MFIs for the financing.
“The Zimbabwean economy is highly informalised and most of the people who are doing business in the small enterprises sector borrow money from MFIs, so we are trying to stop it at source,” said Chitambo.
“Rather than calling us loan sharks, we want to show the world that we are also socially responsible.”
Hivos programme officer, Ndumiso Mpofu said with SMEs being the major source of employment creation in Zimbabwe and MFIs being their major finance source, it was incumbent upon the institutions to emphasise the green-agenda.
“It critical if you look at our country Zimbabwe, a lot of employment is being created by SMEs and these SMEs are financed by MFIs and therefore if we are to tackle the issue of environmental degradation, use of energy, the entry point should be the financing of these technologies,” he said.
Climate change expert Mr Colin Mutasa said people could contribute positively in the greening agenda by desisting or minimising practises which are harmful to the environment.
Mr Mutasa said people could contribute by, for example, minimising electricity usage by switching off unnecessary appliances, cut on using vehicles which pollute the atmosphere and cutting off trees.
“According to research, 95 percent of climate change is as a result of human actions through emission of greenhouse gasses,” he said, adding the remainder was from other natural processes.
But some delegates at the conference questioned whether the green-agenda was really a priority in the country when the question of basic survival was at the summit of the agenda for most people and companies.
“You find that due to power outages sometimes we are forced to turn to firewood which is against the greening agenda,” said one delegate. – New Ziana
Online Reporter