The Reserve Bank of Zimbabwe
(RBZ) said on yesterday it had registered 10 new micro-finance institutions (MFI) to bring the total number of small money lenders in the country to 173 as at the end of September, 2016.The MFI sector is viewed as a critical window of extending financial services to the unbanked and mostly low income communities.
The MFIs are only allowed to extend credit while there are also micro-finance banks (MFBs) which have recently been licensed to take deposits as well as lend money.
To operate, the micro-finance institutions are among other things required to have a minimum capital threshold of $20 000 while MFBs require $5 million.
According to the central bank’s Registrar of Microfinance Institutions, seven out of the 10 new MFIs are registered to operate in the capital Harare, two in Bulawayo and one in Shurugwi.
The new registrants include Umtanashi Finance, Great Relief Limited,Valley Finance, Twinstock Capital and Bluegrouse Finance.
“This (registration) brings the number of institutions authorized to conduct the business of providing loans in terms of the Microfinance Act to 173 as at 30 September 2016,” the RBZ said.
Last data availed by the central bank showed that the microfinance
sector had extended loans worth $183.4 million to their clients by mid this year, about $4 million shy of the $187.2 million extended for the whole of 2015.
In its last monetary policy announced in September this year, the Reserve Bank of Zimbabwe set the maximum interest rate that the MFIs will charge on loans at 10 percent per month with effect from October 10, 2016 down from 20 percent per month which they were charging.
The reduction was aimed at encouraging borrowing to reduce poverty as
well as encourage and stimulate productivity especially in the small
enterprises sector. – New Ziana.