Microfinance loans on the rise in Zimbabwe

Oct 07, 2014

Loans from micro-finance institutions rose 83.24 per cent to reach a total of $177.8 million (€141.6 million) in the first half of the year in Zimbabwe, according to new figures from the Reserve Bank of Zimbabwe (RBZ).

Loans from micro-finance institutions rose 83.24 per cent to reach a total of $177.8 million (€141.6 million) in the first half of the year in Zimbabwe, according to new figures from the Reserve Bank of Zimbabwe (RBZ).

"The improvement is attributed to efforts by the industry to enhance credit analysis in an effort to curtail over indebtedness among borrowers," said the central bank.

"A number of MFIs are increasingly making use of credit checks while others are resorting to offering salary-based loans whose repayments are based on deductions at source."

The total loans in the sector constituted about 4.7 per cent of total banking sector loans of
$3.81

billion.

According to the RBZ, the micro-finance loan portfolio was mainly composed of consumption loans at the expense of productive sector funding, with consumption lending representing 67 per cent of total loans.

As
of
June 30, 2014, there were 130 registered MFIs. The central bank revealed that MFIs had recently expanded branches from 334 to 442, "reflecting a drive by MFIs to reach out to marginalised areas where communities had no access to formal financial services".ADNFCR-2976-ID-801752903-ADNFCR