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Dr Kereke

Farirai Machivenyika Senior Reporter
BIKITA West legislator Dr Munyaradzi Kereke has urged financial institutions to be flexible in extending loans to borrowers and not insist on collateral if poverty eradication is to succeed.
Dr Kereke said this while debating a motion moved by MDC-T legislator Thokozani Khupe calling on Government to establish a Women’s Bank.

“When you look at our country, the financial services sector is becoming a vehicle that has a negative effect to development,” he said.
“We need as a country to move our banking system from the issue of demanding collateral all the time. We need to look the basis of cashflow lending where we look at the viability of the project and then ringfence the loan.

“Our bankers must also stop being armchair bankers, but must go on the shop floor and supervise projects. If we are serious that is what we want to fight poverty.”

Dr Kereke said the demand for collateral by banks was not compatible with the fight against poverty as it assumed that borrowers had assets to secure the loans.

He said while calls for the establishement of a bank dedicated to empowering women were noble, it would face operational challenges if the illegal sanctions imposed on Zimbabwe were not removed.

“For as long as we want to start a bank and as long as that bank transacts in US dollars, it must first clear with New York and if you are trading in the Euro you must also clear with Europe. So, if that bank were to be in existence it would face technical rigidities caused by sanctions,” Dr Kereke said.

Zimbabwe’s banks usually insist on borrowers producing collateral before loans are availed to them.
This has caused lack of progress in several sectors, especially agriculture.

Farmers are failing to access the nearly US$1 billion that banks set aside for the agricultural season because they do not have collateral.