RBZ announces new credit framework to boost Zimbabwe’s key sectors
HARARE — The Reserve Bank of Zimbabwe (RBZ) has announced a comprehensive plan to enhance financial inclusion and support critical economic sectors. At the ZNCC Business Review Conference held today, RBZ Governor John Mangudya detailed a new credit infrastructure initiative that aims to bolster agriculture, manufacturing, and mining.
The initiative is set to empower these sectors by leveraging secured loans, with an emphasis on agriculture (17.7%), manufacturing (13.82%), and mining (11.74%). To facilitate this, banks have been providing loans secured by movable assets such as agricultural equipment and notarial general covering bonds. This strategy has enabled farmers to use their assets to obtain loans, while small and medium-sized enterprises (SMEs) have registered security interests amounting to ZWL$130.89 billion (USD1 = ZWL5,842.720) in movable property collateral.
Governor Mangudya underscored the significant contribution of the informal sector to Zimbabwe’s economy, which exceeds $14 billion annually. Despite this, the sector still experiences limited banking support. However, there has been a noticeable improvement in lending practices across various industries, with the loan-to-deposit ratio increasing from below 40% in January 2021 to over 55% as of August 2023.
Zimbabwe National Chamber of Commerce (ZNCC) President Mike Kamungeremu highlighted the need for reduced government regulations to promote market efficiency and foster private sector-led growth. Achieving upper-middle-income status by 2030 is a target that promises benefits for all economic players, including the government through efficient service delivery within a stable business environment.
