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The Zimbabwe Microfinance Wholesale Facility (ZMWF) is targeting to increase disbursements by over 100 percent to $10 million next year on the back of support from players in the sector and development partners.

The donor funded ZMWF, which was established over two years ago to provide concessionary funding to microfinance institutions, has so far this year disbursed $4 million.

The facility is funded by DANIDA of Denmark, DFID of the United Kingdom, GIZ from Germany and Hivos from the Netherlands. ZMWF fund manager Brian Zimunhu told New Ziana the facility had steadily grown since its inception when it had a seed capital of $3,2 million.

Mr Zimunhu said the facility had this year disbursed over $4 million, up from $1,3 million last year.

“Our target is about $10 million by the end of 2015,” he said, while lauding the development partners for their continued support.

He said the fund was supporting about 16 MFIs in the country with cheap funding at interest rates of around 11 percent per annum. Absence of cheap capital in the economy has resulted in MFIs struggling to access funding from banks for on-lending due to persistent liquidity constraints.

Mr Zimunhu said there was high demand for capital in the sector but noted that the institutions still required training on managing the funds.

In spite of the financial challenges the MFI sector is facing, which according to the Reserve Bank of Zimbabwe has 153 institutions operating, it is estimated to have disbursed $170 million in the first nine months of the year.

Mr Zimunhu said the facility was also encouraging beneficiary MFIs to further on lend at affordable interest rates as they were getting funding at rates cheaper than prevailing market rates.

“MFIs set their own rates but we would not be happy if they set them too high because they charge their interest per month while we charge them annually,” he said.

MFIs have been nick named loan sharks due to their high interest rates and use of unorthodox means to collect their dues. — New Ziana.