AT least 31 companies have accessed the Distressed and Marginalised Areas Fund (Dimaf) as of mid-January this year, an official with a local building society has said.
BY KUDZAI CHIMHANGWA
CABS managing director Kevin Terry said about 70% of companies that benefited were based in Bulawayo.
The US$40 million fund was launched in October 2011 with the objective of resuscitating ailing companies from Bulawayo and other areas.
Terry said that as of mid-January 2013, the bank had approved a total of US$19,181,250 worth of projects under the fund.
He said US$15,788,750 had successfully been disbursed to date.
“A total of US$9,275,500 has been disbursed to some Bulawayo-based companies. Companies that have benefited from the fund are from various sectors of the economy, including agriculture, manufacturing, services and distribution,” said Terry. “A total of the 31 beneficiaries have accessed the fund of which 24 are based in Bulawayo.”
Old Mutual and the government signed a memorandum of understanding to set up a US$40million revolving fund with each party contributing US$20 million.
The administrative and regulatory processes, which include conditions and requirements from all parties providing the funding, were yet to be concluded thereby delaying disbursement.
The conditions for accessing the funds were linked to the requirements that were set up by both parties. Some of the requirements were aimed at enabling the fund to be revolving and to be of a long term nature that is sustainable.
The fund however, continues to be a contentious issue with some companies in the designated areas complaining that access to the fund was almost impossible.
The minimum requirements for companies to qualify to access the funds include two years accounts in the form of management accounts or financial accounts, acceptable collateral, clean tax records, projections for capital expenditure loans, budgets and cash flows, among others.
Companies hardest hit by the economic challenges of the past decade were mainly located in Bulawayo, once the country’s light industry hub that employed thousands of people.
The fund was set up as an acknowledgment of the difficulties that businesses are presently facing in accessing capital for operations and expansion programmes owing to limited availability of money on the domestic market.
Over 90 companies have since 2009 closed shop in Bulawayo, leaving more than 20 000 workers jobless.
Before independence, Bulawayo was generally known as the country’s hub of industry and at one point accounted for 75% of the country’s manufacturing activities.