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Minister Chinamasa

Herald Reporter
The National Assembly on Thursday ratified a $3 million loan facility to finance operations for micro, small and medium-scale enterprises that was obtained from the Arab Bank for Economic Development in Africa. The loan facility was signed by Finance and Economic Development Minister Patrick Chinamasa and the ABEDA on October 14, this year in Sudan. In his address before the ratification Minister Chinamasa said the facility had favourable terms that should be exploited by SMEs.

“The $3 million line of credit has concessionary interest of one percent and has tenure of 20 years and five-year grace period.

“It seeks to address challenges faced by SMEs that include re-tooling and working capitals. Currently they are facing high interest rates averaging 19 percent and stringent borrowing conditions and most of the time the loans are short-term,” Minister Chinamasa said.

He said the money would be administered by the Small and Medium Enterprises Development Corporation with $1,2 million going to small enterprises while medium and micro enterprises would receive US$900 000 each.

Minister Chinamasa also said the ABEDA had also expressed interest in funding development projects in the country depending on the performance of the $3 million facility.

“In my discussion with the bank they said they have given this small amount because they want to test our repaying record. If it is satisfactory they will avail more resources because they want to assist in the development of this economy,” he said.

Legislators across the political divide welcomed the facility and called on Government to ensure that only intended beneficiaries access the funds.

“The fund is welcome and should benefit everyone, especially rural communities where most of the country’s population is. It should not only benefit people in urban areas as happened with previous loan facilities,” Mutasa South Representative Cde Irene Zindi said.

Kambuzuma legislator Mr Willas Madzimure said the money should target those in productive sectors.

“We want small businesses that are into production that can substitute imports. Government should also set the criteria for those that should benefit so that we prevent abuse of the facility,” Mr Madzimure said.

Hurungwe West Representative Cde Temba Mliswa said the facility was welcome in light of the ongoing implementation of Government’s economic blueprint Zim-Asset.

“We have Zim-Asset and this money should find space in one the four clusters that is Food Security and Nutrition, Social Services and Poverty Eradication, Infrastructure and Utilities, and Value Addition and Beneficiation.

“We should have a criteria that will make sure the money gets to everyone and guarantees that issues to do with corruption and nepotism are addressed in the disbursement,” he said.

The National Assembly also ratified an agreement for the establishment of the Country Office for the African Development Bank.

The agreement was signed on December 22, 2010 but had not been ratified as required by law.

The AfDB has of late been playing a pivotal role in the country’s economy, especially in the areas of infrastructure development, water and sanitation.

Last week it provided a $180 million grant that will go towards the rehabilitation of the Kariba Dam wall and Bulawayo water reticulation system, among others.