October 29, 2020

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Micro-Finance Institution-Key Pillars For Community Growth

By Shingirai Vambe

Harare- The Reserve Of Zimbabwe (RBZ) has recognised microfinance as key pillars of financial inclusion agenda and a catalyst for inclusive growth and development in Zimbabwe, RBZ deputy Governor Mrs Jesimine Chipika said during the National Microfinance Excellence awards in Harare yesterday.

Chipika said she was pleased with the increase rate of lending to women in business though much should be done to include those in the rural areas.

“I am so please to note that the lending to women increased from 36% in June 2018 to 42% in June 2019, notwithstanding the above, the outreach of only 396.000 clients remains a drop in the ocean when related to the millions who are financially excluded, I am convinced that the sector can do more” Chipika said.

She added that the central bank does not expect microfinance institutions (MFIs) to be micro in size of the balance sheets and operations but to see large MFI with high capital levels and enhanced capacity but serving the marginalised and financially excluded communities.

Zimbabwe Association of Microfinance Institution (ZAMFI), Board Chairperson, Virginia Sibanda, said 2019 has been a year that most of the entrepreneurs want to forget but what brings them together is the coalesce around ensuring provision of financial service to marginalised communities.

“When I stood in front of you last year, little did any of us know that we were heading into a storm but what I know is that the poor people that we seek to serve have been hard hit by the current state of the economy, including financial institution, so what are we going to do about if” she asked?

Thanking the Ministry of finance, RBZ and Parliament, Sibanda remain optimistic that there is going to be a great change in the financial sector towards growth noting the changes in the new licensing framework.

“We all know of the Microfinance Act Amendments were passed into law last month with provisions of a new licensing framework, the licence did not come on silver platter and it is now the responsibility of the sector to note that whilst this development is welcome it also comes with responsibility on our part as practitioners”

Friday night’s awards which were being held in Harare saw various MFIs walking away with accolades sponsored by Econet Cassava Smart Tech, Musoni, Coronation, Zimbabwe Stock Exchange and Craft Silicon.

The best overall winner, Microplan walked away with 4 accolades while the Zimbabwe Women’s Empowerment Bank walked away with two awards, People’s Own Savings Bank and Old Mutual were amongst winners.

“Let us move on with technology and go digital, because international investors are increasingly using the digital platforms as tools to perform due diligence on potential support to MFIs” the Governor said during the award ceremony.