MICRO-financial institutions (MFIs) disbursed $87,3 million in loans by the end of June, a huge jump from the previous quarter where they doled out $56 million.
BY FIDELITY MHLANGA
As at the end of March 2018, the loans were pegged at $59,4 million.
The MFIs’ loan portfolio grew from $98,7 million in December last year to $115,6 million in march 2018 before surging to $137,1 million by the end of June.
According to the Zimbabwe Association of Microfinance Institutions (Zamfi) 2018 half-year report, the multiple exchange rate negatively distorted the pricing system of both goods and services including credit facilities.
“Like other sectors in the country, the microfinance sector is being affected by the multiple exchange rate system, which both government and the monetary authorities have allowed to exist,” Zamfi said.
“This system negatively distorts the pricing system of both goods and services including credit facilities.”
The parallel foreign currency market uses different rates for transactions involving the real- time gross settlement system (RTG), bond notes cash and mobile money (Ecocash).
Zamfi said the value of the underlying balances on financial accounts, which are used to monitor the financial performance of the respective MFIs, was distorted.
“This is a matter of grave concern not only to the local investors, but also to international investors with keen interest to invest in the country,” the association said.
“The longer it takes to deal with this matter of the multiple exchange system, the greater the financial risk that MFIs are exposed to.
“Ultimately, no significant international investment funds will be brought into the country by the investors.
“A prudent and cautious investor would require a guarantee of the safety of his investment and existence of a robust financial reporting system that reflects the true and fair performance of his investment over time.”
Zamfi said the majority of MFIs were offering more of the same credit facilities to predominantly salaried clients, a situation that leads to concentration of risk.