HARARE-- The Reserve Bank of Zimbabwe (RBZ) says it registered 19 micro-finance institutions in the first half of this year, bringing the total number of licensed small lenders to 194 as at end-June.
The MFIs, nick-named, banks for the poor, are renowned for their relaxed lending conditions compared with traditional banks and are, as a result, popular with low income earners and the poor.
Those registered between January and June this year include the government-owned Empower Bank, Taddy Capital Investmments, Mula Microfinance, Yebo Financial Solutions, Quick Acess, Raysun Capital and Axafin Private Limited.
This brings the number of institutions authorized to conduct business of providing loans in terms of the Micro-Finance Act to 194 as at 30 June 2018, said RBZ registrar of micro-financiers Norman Mataruka.
The registered MFIs were licensed in three categories namely, deposit-taking micro-finance institution, credit only MFI and money-lending institution.
According to the Zimbabwe Association of Microfinance Institutions (Zamfi), which oversees the sector, the small lenders loaned out 87.3 million US dollars in the first half of this year, benefiting 210,591 people.'
While the sector continues to make notable progress, it has said it is facing constraints which include high cost of funding, shortage of cash and foreign currency, a general rise in perational costs, limited product development and the perceived high country risk.
The MFIs are also struggling to access cheaper loans from local banks for on-lending to their clients because of high interest rates of between 12 to 18 per cent per annum charged by the banks.
Continued existence of a multi-tier exchange rate in the economy also threatened viability of the sector, Zamfi has noted, as it not only dissuaded investors, but also presented financial risks for MFIs.
Source: NAM NEWS NETWORK