FIRST Factoring Company of Zimbabwe (FFCZ) has been granted an asset management licence in a move expected to widen the scope of business for the young financial services fi
The financial services company, whose flagship products have been debt factoring and discounting since its inception in 1998, was licenced under the Collective Investments Act in September, becoming the youngest player in the fast-growing asset management industry.
The new subsidiary, to be called First Factoring Asset Management Company (FFAMC), is expected to open doors to the public tomorrow.
A spokesman this week said most of the staff was already in place and they are currently finalising the launch of the new company.
Collen Magurah heads FFAMC.
“We are in the process of setting up and everything is now in place. We should be opening to the public on November 1,” the spokesman said.
He was upbeat about the growth prospects for the young company, noting that its entry onto the market would complement the existing services offered by the parent company.
“We believe that, be-cause of the current eco-nomic conditions, there are opportunities for those with the right kind of products,” he said.
Key areas of focus for FFAMC are treasury management services, private portfolio management, fund management and unit trusts management.
Under the treasury function, the main product lines include Treasury Bills, negotiable certificates of deposit, bankers’ acceptances, commercial paper and call deposits.
There is also a wide choice of products available to investors under the private portfolio management, fund management and unit trusts functions.
The private portfolio management function targets high net-worth individuals who normally do not have time to watch the equities and money market.
The granting of a licence to FFAMC complements other services already offered by FFCZ such as installment dis-counting, rental discounting and order financing.
Installment discounting is a new facility that allows small and medium-scale enterprises (SMEs) to offer credit facilities to their clients.
The advantages of the facility are that it improves the SME’s cash-flow situation, removes the need for extra borrowing from banks in order to carry on producing, thereby enabling the entrepreneurs to beat inflation by getting upfront the money owed to them by their own debtors.
Through its flagship rental discounting, FFCZ enables small to medium-scale entrepreneurs to meet their short-term cash-flow requirements by allowing them to cede to the company future rentals from properties they own.
This product is available to people with properties from which they receive rent every month as well as to those who occupy their own properties.
The order financing product affords business people the opportunity to process orders for outstanding jobs in cases where they do not have adequate cash-flows to meet the orders. The businessperson cedes the order to FFCZ and receives part of the money needed to finance outstanding jobs.